Intermittent application of parathyroid hormone (PTH) has well established anabolic effects on bone mass in rodents and humans. Although transcriptional mechanisms responsible for these effects are not fully understood, it is recognized that transcriptional factor cAMP response element binding protein (CREB) mediates PTH signaling in osteoblasts, and that there is a communication between the PTH-CREB pathway and the BMP2 signaling pathway, which is important for osteoblast differentiation and bone formations. These findings, in conjunction with putative cAMP response elements (CREs) in the BMP2 promoter, led us to hypothesize that the PTH-CREB pathway could be a positive regulator of BMP2 transcription in osteoblasts. To test this hypothesis, we first demonstrated that PTH signaling activated CREB by phosphorylation in osteoblasts, and that both PTH and CREB were capable of promoting osteoblastic differentiation of primary mouse osteoblast cells and multiple rodent osteoblast cell lines. Importantly, we found that the PTH-CREB signaling pathway functioned as an effective activator of BMP2 expression, as pharmacologic and genetic modulation of PTH-CREB activity significantly affected BMP2 expression levels in these cells. Lastly, through multiple promoter assays, including promoter reporter deletion, mutation, chromatin immunoprecipitation (ChIP), and electrophoretic mobility shift assay (EMSA), we identified a specific CRE in the BMP2 promoter which is responsible for CREB transactivation of the BMP2 gene in osteoblasts. Together, these results demonstrate that the anabolic function of PTH signaling in bone is mediated, at least in part, by CREB transactivation of BMP2 expression in osteoblasts.