We have previously shown that differentiation of hypertrophic chondrocytes is delayed in mice expressing a mutated PTH/PTHrP receptor (PTHR) (called DSEL here) that stimulates adenylyl cyclase normally but fails to activate phospholipase C (PLC). To better understand the role of PLC signaling via the PTHR in skeletal and mineral homeostasis, we examined these mice fed a normal or calcium-deficient diet. On a standard diet, DSEL mice displayed a modest decrease in bone mass. Remarkably, when fed a low-calcium diet or infused with PTH, DSEL mice exhibited strikingly curtailed peritrabecular stromal cell responses and attenuated new bone formation when compared with Wt mice. Attenuated in vitro colony formation was also observed in bone marrow cells derived from DSEL mice fed a low-calcium diet. Furthermore, PTH stimulated proliferation and increased mRNAs encoding cyclin D1 in primary osteoblasts derived from Wt but not from DSEL mice. Our data indicate that PLC signaling through the PTHR is required for skeletal homeostasis.