Parathyroid hormone-related protein (PTHrP) is involved in epithelial-mesenchymal cell interactions during development of various tissues and organs. Tooth germ development is a classical model for this interaction. In tooth germs, PTHrP is expressed in the enamel organ (epithelial component), whereas its major receptor, the type I PTH/PTHrP receptor is expressed in cells of the alveolar bone and dental follicle (mesenchymal components). To clarify the role of PTHrP during fetal tooth germ development, PTHrP gene-knockout mice were used for histochemical and ultrastructural analysis. In wild-type mice, osteoclastic cells were aligned predominantly in the inner aspects of the alveolar bone surrounding the developing tooth germs throughout the late embryonic (after embryonic, 17.5 days) and neonatal animals examined. In contrast, osteoblasts were predominant in corresponding areas of fetal homozygous PTHrP-gene knockout mice with only occasional osteoclasts. In such areas, cell-free surfaces showing cement line-like tartrate-resistant acid phosphatase (TRAP) reactions were frequently observed. In neonatal homozygous mice, bone spicules were often shown to penetrate and/or compress the enamel organ and caused partial destruction of the tooth germs. Osteoclasts were few in number in the inner aspects of the alveolar bone, and had poorly developed ruffled border. No morphological abnormality was noted in cells of the tooth germs proper. On bone surfaces away from developing tooth germs, functional osteoclasts with structural features similar to those in wild-type mice were observed in homozygous mice. These observations suggest that PTHrP is required to maintain an appropriate spatiotemporal arrangement of bone cells and osteoclast function, which are necessary for the normal development of tooth germ and alveolar bone encasing the tooth germ. The observation also demonstrates that PTHrP deficiency affects the structure and function of osteoclasts exclusively those located in the vicinity of the growing tooth germ.