Intermittent PTH administration builds bone mass and prevents fractures, but its mechanism of action is unclear. We genetically deleted the PTH/PTHrP receptor (PTH1R) in mesenchymal stem cells using Prx1Cre and found low bone formation, increased bone resorption, and high bone marrow adipose tissue (BMAT). Bone marrow adipocytes traced to Prx1 and expressed classic adipogenic markers and high receptor activator of nuclear factor kappa B ligand (Rankl) expression.