Parathyroid hormone (PTH) and derivatives such as teriparatide (PTH (1–34)) have gained major attention in recent years in treatment of osteoporosis due to their anabolic action on the bone remodelling cycle. These drugs are currently the only available agents being classified as sole anabolic. Interestingly, action of these agents strongly depends on the way they are administered. While these drugs act catabolically when given continuously, they act anabolically when administered in a pulsatile way. Several hypotheses have been proposed to explain this behaviour. However, so far no agreement as regards detailed underlying biochemical regulation has been made. Parallel to intense experimental research to resolve this problem a few mathematical models have been proposed dealing with this subject. In this paper we propose a novel underlying mechanism for anabolic action of PTH based on mathematical modelling of bone cell population dynamics. Using this model allows us to investigate various hypotheses put forward by bone biologists. Additionally, comparison with other theoretical models proposed in the literature will be made.