E-64d, a membrane-permeable cysteine protease inhibitor, was tested for its ability to inhibit PTH-induced contraction in intact mouse MC-3T3-E1 osteoblastic cells. Incubation of MC-3T3-E1 cells with vehicle (DMSO) or E-64c, a nonpermeant cysteine protease inhibitor, in the presence or in the absence of PTH had no effects on cAMP production or on morphology from 0 to 90 minutes after addition. In contrast, treatment with E-64d markedly attenuated PTH-induced contraction in these cells. These findings suggest that cysteine proteases, such as the calcium-activated neutral proteases (calpains), are involved in PTH-induced osteoblastic contraction. The observation that cysteine protease activity mediates PTH-induced osteoblastic contraction also suggests that endogenous inhibitors, such as calpastatin, may also be present in the osteoblast and play a role in the regulation of stimulus-response coupling in bone. This mechanism may provide another regulatory point at which bone cells may be pharmacologically manipulated in clinical situations characterized by excessive bone resorption.