New research published in Cell Metabolism reveals an important mechanism underlying the anabolic effects of parathyroid hormone (PTH) on bone. Mice with conditional deletion of the gene encoding the PTH 1 receptor (PTH1R) in bone marrow progenitors had increased bone marrow adipose tissue (BMAT), which was accompanied by increased bone resorption and decreased bone mass. Adipocytes purified from the bone marrow of mutant mice strongly expressed adipocytic transcription factors, adipocyte differentiation markers and RANKL. Direct regulation of BMAT by PTH was confirmed by the marked reduction in the volume of BMAT in control mice but not in mutant mice in response to administration of PTH1–34. Moreover, analysis of bone biopsy samples from patients with osteoporosis revealed a 27% reduction in the number of bone marrow adipocytes after 18 months of treatment with PTH1–34. The findings indicate that PTH reduces marrow adipogenesis by regulating the bone–fat fate of mesenchymal progenitors.