Previously we showed that the activator protein-1 site and the runt domain binding site in the collagenase-3 promoter act cooperatively in response to parathyroid hormone (PTH) in the rat osteoblastic osteosarcoma cell line, UMR 106-01. Our results of the expression pattern of core binding factor alpha1 (Cbfa1), which binds to the runt domain site, indicated that there is no change in the levels of Cbfa1 protein or RNA under either control conditions or after PTH treatment. The importance of posttranslational modification of Cbfa1 in the signaling pathway for PTH-induced collagenase-3 promoter activity was analyzed. PTH stimulation of collagenase-3 promoter activity was completely abrogated by protein kinase A (PKA) inhibition. To determine the role of PKA activity with respect to Cbfa1 activation (in addition to its known activity of phosphorylating cAMP-response element-binding protein to enhance c-fos promoter activity), we utilized the heterologous Gal4 transcription system. PTH stimulated the transactivation of activation domain-3 in Cbfa1 through the PKA site. In vitro phosphorylation studies indicated that the PKA site in the wild type activation domain-3 is a substrate for phosphorylation by PKA. Thus, we demonstrate that PTH induces a PKA-dependent transactivation of Cbfa1, and this transactivation is required for collagenase-3 promoter activity in UMR cells.