Cell signaling mediated by the G protein-coupled parathyroid hormone receptor type 1 (PTHR) is fundamental to bone and kidney physiology. It has been unclear how the two ligand systems--PTH, endocrine and homeostatic, and PTH-related peptide (PTHrP), paracrine--can effectively operate with only one receptor and trigger different durations of the cAMP responses. Here we analyze the ligand response by measuring the kinetics of activation and deactivation for each individual reaction step along the PTHR signaling cascade. We found that during the time frame of G protein coupling and cAMP production, PTHrP(1-36) action was restricted to the cell surface, whereas PTH(1-34) had moved to internalized compartments where it remained associated with the PTHR and Galpha(s), potentially as a persistent and active ternary complex. Such marked differences suggest a mechanism by which PTH and PTHrP induce differential responses, and these results indicate that the central tenet that cAMP production originates exclusively at the cell membrane must be revised.