Parathyroid hormone (PTH)-related protein (PTH-rP) is an important autocrine/paracrine attenuator of programmed cell differentiation whose expression is restricted to the epithelial layer in tooth development. The PTH/PTHrP receptor (PPR) mRNA in contrast is detected in the dental papilla, suggesting that PTHrP and the PPR may modulate epithelial–mesenchymal interactions. To explore the possible interactions, we studied the previously described transgenic mice in which a constitutively active PPR is targeted to osteoblastic cells. These transgenic mice have a vivid postnatal bone and tooth phenotype, with normal tooth eruption but abnormal, widened crowns. Transgene mRNA expression was first detected at birth in the dental papilla and, at 1 week postnatally, in odontoblasts. There was no transgene expression in ameloblasts or in other epithelial structures. Prenatally, transgenic molars and incisors revealed no remarkable change. By the age of 1 week, the dental papilla was widened, with disorganization of the odontoblastic layer and decreased dentin matrix. In addition, the number of cusps was abnormally increased, the ameloblastic layer disorganized, and enamel matrix decreased. Odontoblastic and, surprisingly, ameloblastic cytodifferentiation was impaired, as shown by in situ hybridization and electron microscopy. Interestingly, ameloblastic expression of Sonic Hedgehog, a major determinant of ameloblastic cytodifferentiation, was dramatically altered in the transgenic molars. These data suggest that odontoblastic activation of the PPR may play an important role in terminal odontoblastic and, indirectly, ameloblastic cytodifferentiation, and describe a useful model to study how this novel action of the PPR may modulate mesenchymal/epithelial interactions at later stages of tooth morphogenesis and development.