Parathyroid hormone-related protein (PTHrP) is widely expressed in the fibrous outer layer of the periosteum (PO), and the PTH/PTHrP type I receptor (PTHR1) is expressed in the inner PO cambial layer. The cambial layer gives rise to the PO osteoblasts (OBs) and osteoclasts (OCs) that model/remodel the cortical bone surface during development as well as during fracture healing. PTHrP has been implicated in the regulation of PO modeling during development, but nothing is known as regards a role of PTHrP in this location during fracture healing.We propose that PTHrP in the fibrous layer of the PO may be a key regulatory factor in remodeling bone formation during fracture repair. We first assessed whether PTHrP expression in the fibrous PO is associated with PO osteoblast induction in the subjacent cambial PO using a tibial fracture model in PTHrP-lacZ mice. Our results revealed that both PTHrP expression and osteoblast induction in PO were induced 3days post-fracture. We then investigated a potential functional role of PO PTHrP during fracture repair by performing tibial fracture surgery in 10-week-old CD1 control and PTHrP conditional knockout (PTHrP cKO) mice that lack PO PTHrP. We found that callus size and formation as well as woven bone mineralization in PTHrP cKO mice were impaired compared to that in CD1 mice. Concordant with these findings, functional enzyme staining revealed impaired OB formation and OC activity in the cKO mice.We conclude that deleting PO PTHrP impairs cartilaginous callus formation, maturation and ossification as well as remodeling during fracture healing. These data are the initial genetic evidence suggesting that PO PTHrP may induce osteoblastic activity and regulate fracture healing on the cortical bone surface.