We studied the effects of parathyroid hormone (PTH) on differentiation of chondroprogenitor cells during the repair of full-thickness articular cartilage defects. Three-millimeter cylindrical full-thickness articular cartilage defects, which are small enough to be resurfaced spontaneously by hyaline cartilage, were created in the femoral trochlea of the rabbit knee. Recombinant human PTH(1-84) (hPTH[1-84]) (25 ng/h) then was administered into the joint cavity with an osmotic pump, or in control animals, saline alone was administered. The animals were killed at 1, 2, 4, and 8 weeks. At 1 week, the defects were filled with undifferentiated cells, regardless of the PTH treatments. By 8 weeks, well-developed cartilage covered the defects with reconstitution of subchondral bone up to the original bone-articular cartilage junction. In contrast, no evidence of chondrogenic differentiation was seen at any time during the experimental period in the defects treated with PTH. The reparative tissues also were examined immunohistochemically using anti-proliferating cell nuclear antigen (PCNA) and anti-PTH/PTH-related peptide (PTHrP) receptor antibodies. Interestingly, the chondroprogenitor cells that filled the defects expressed PTH/PTHrP receptor, suggesting that these cells are capable of responding to PTH/PTHrP signaling before overt chondrogenesis. Application of PTH did not interfere with proliferation but inhibited chondrogenic differentiation of the cells resulting in the formation of fibrous tissue that lost the expression of PTH/PTHrP receptor within 4 weeks.