Prior exposure to PTH markedly decreased the responsiveness of isolated, cultured bone cells to the stimulatory effect of the hormone on cyclic AMP formation. This process of desensitization developed within 30 min, persisted during prolonged incubation of the cells in PTH-free medium, and could not be attributed to enhanced excretion of cyclic AMP from the cells, nor to the extracellular accumulation of an inhibitor of PTH action. Adenylate cyclase activity in a subcellular fraction derived from PTH-treated cells was refractory to PTH and to sodium fluoride. These results indicate that PTH-mediated desensitization reflects, at least in part, impaired cyclic AMP formation. Adenosine and PGE2, known stimulators of bone cell cyclic AMP formation, elicited agonist-specific desensitization, and also desensitized bone cells to the effects of subsequently added PTH. PTH blunted the cellular response to adenosine, but not to PGE2. Modest refractoriness to PTH was evident in cells that had been treated previously with the cyclic AMP phosphodiesterase inhibitors IBMX, theophylline, and Bt2cAMP, whereas treatment with sodium butyrate had no effect. The actions of the inhibitors, like that of PTH, were rapid in onset and long-lasting. Desensitization caused by previous treatment with the phosphodiesterase inhibitors, and with PTH itself, was accompanied by enhanced phosphodiesterase activity in bone cell homogenates. Induction of phosphodiesterase activity may well contribute to desensitization in the bone cell system.