Parathyroid hormone (PTH) suppresses Dickkopf 1 (Dkk1) expression in osteoblasts. To determine whether this suppression is essential for PTH-mediated Wnt signaling and bone formation, we examined mice that overexpress Dkk1 in osteoblasts (Dkk1 mice). Dkk1 mice were osteopenic due to abnormal osteoblast and osteoclast activity. When fed a low-calcium diet, and in two other models of hyperparathyroidism, these mice failed to develop the peritrabecular stromal cell response ("osteitis fibrosis") and new bone formation seen in wild-type mice. Despite these effects of Dkk1 overexpression, PTH still activated Wnt signaling in Dkk1 mice and in osteoblastic cells cultured from these mice. In cultured MC3T3E1 preosteoblastic cells, PTH dramatically suppressed Dkk1 expression, induced PKA-mediated phosphorylation of beta-catenin, and significantly enhanced Lef1 expression. Our findings indicate that the full actions of PTH require intact Wnt signaling but that PTH can activate the Wnt pathway despite overexpression of Dkk1.