Parathyroid hormone (PTH) signaling via PTH 1 receptor (PTH1R) involves mitogen-activated protein kinase (MAPK) pathways. MAPK phosphatase 1 (MKP1) dephosphorylates and inactivates MAPKs in osteoblasts, the bone-forming cells. We previously showed that PTH1R activation in differentiated osteoblasts upregulates MKP1 and downregulates pERK1/2-MAPK and cyclin D1. In this study, we evaluated the skeletal phenotype of Mkp1 knockout (KO) mice and the effects of PTH in vivo and in vitro. Microcomputed tomography analysis of proximal tibiae and distal femora from 12-week-old Mkp1 KO female mice revealed osteopenic phenotype with significant reduction (8-46%) in bone parameters compared with wild-type (WT) controls. Histomorphometric analysis showed decreased trabecular bone area in KO females. Levels of serum osteocalcin (OCN) were lower and serum tartrate-resistant acid phosphatase 5b (TRAP5b) was higher in KO animals. Treatment of neonatal mice with hPTH (1-34) for 3 weeks showed attenuated anabolic responses in the distal femora of KO mice compared with WT mice. Primary osteoblasts derived from KO mice displayed delayed differentiation determined by alkaline phosphatase activity, and reduced expressions of Ocn and Runx2 genes associated with osteoblast maturation and function. Cells from KO females exhibited attenuated PTH response in mineralized nodule formation in vitro. Remarkably, this observation was correlated with decreased PTH response of matrix Gla protein expression. Expressions of pERK1/2 and cyclin D1 were inhibited dramatically by PTH in differentiated osteoblasts from WT mice but much less in osteoblasts from Mkp1 KO mice. In conclusion, MKP1 is important for bone homeostasis, osteoblast differentiation and skeletal responsiveness to PTH.