Calcitonin gene-related peptide (CGRP)-immunoreactive sensory nerve terminals infiltrate all tissues including bone, in which CGRP may play a local regulatory role. To initiate studies on the role of this neuropeptide in bone, osteoblasts were isolated from fetal rat calvariae, treated with CGRP, and analyzed for cAMP and insulin-like growth factor I (IGF-I) production. CGRP alpha and -beta induced a cAMP accumulation in osteoblastic cells, suggesting that they express functional receptors for CGRP. CGRP induced an increase in both IGF-I transcripts and immunoreactive polypeptide. In contrast to prostaglandin E2 (PGE2) treatment, this increase was not accompanied by an augmentation in IGF binding proteins. Although PGE2 induced a more significant increase in IGF-I transcripts than did CGRP, the concentration of IGF-I polypeptide produced by osteoblasts was similar in response to both treatments. It is concluded from this study that CGRP has potent anabolic effects on osteoblasts, an observation which opens possibilities to study the potential therapeutic role of CGRP in osteoporosis.