SUMMARYTeriparatide is the most widely prescribed bone anabolic drug in the world, but its cellular targets remain incompletely defined. The Gli1+ metaphyseal mesenchymal progenitors (MMPs) are a main source for osteoblasts in postnatal growing mice, but their potential response to teriparatide is unknown. Here, by lineage tracing, we show that teriparatide stimulates both proliferation and osteoblast differentiation of MMPs. Single-cell RNA sequencing reveals heterogeneity among MMPs, including an unexpected chondrocyte-like osteoprogenitor (COP). COP expresses the highest level of Hedgehog (Hh) target genes and the insulin-like growth factor 1 receptor (Igf1r) among all cell clusters. COP also expresses Pth1r and further upregulates Igf1r upon teriparatide treatment. Inhibition of Hh signaling or deletion of Igf1r from MMPs diminishes the proliferative and osteogenic effects of teriparatide. The study therefore identifies COP as a teriparatide target wherein Hh and insulin-like growth factor (Igf) signaling are critical for the osteoanabolic response in growing mice.