Thyroid hormone (T3) is essential for normal skeletal development, acting mainly via the TR1 nuclear receptor. Nevertheless, the mechanisms of T3 action in bone are poorly defined. Fibroblast growth factor receptor-1 (FGFR1) is also essential for bone formation. Fgfr1 expression and activity are positively regulated by T3 in osteoblasts and, in mice that harbor a dominant negative PV mutation targeted to TR1 or TR, Fgfr1 expression is sensitive to skeletal thyroid status. To investigate mechanisms underlying T3 regulation of FGFR1, we obtained primary calvarial osteoblasts from wild-type and TR^PV/PV littermate mice. T3 treatment increased Fgfr1 expression 2-fold in wild-type cells but 8-fold in TR^PV/PV osteoblasts. The 4-fold increased T3-sensitivity of TR^PV/PV osteoblasts was associated with a markedly increased ratio of TR1:TR1 expression that resulted from reduced TR1 expression in TR^PV/PV osteoblasts compared to wild-type. Bio-informatic and gel shift studies, and mutational analysis, identified a specific TR binding site 279–264 nucleotides upstream of the murine Fgfr1 promoter transcription start site. Transient transfection analysis of a series of Fgfr1 promoter 5'-deletion constructs, of a mutant reporter construct, and a series of heterologous promoter constructs, confirmed that this region of the promoter mediates a TR-dependent transcriptional response to T3. Thus, in addition to indirect regulation of FGFR1 expression by T3 reported previously, T3 also activates the Fgfr1 promoter directly via a thyroid hormone response element located at positions -279/-264.