Aim: The aim of the study was to analyze the bone regenerative potential of a recombinant parathormone derivative in experimentally induced critical-size calvarial defects in Wistar albino rats. Materials and methods: Critical-size cranial defects were created in 30 Wistar albino rats which were randomly divided into five groups. Group I was the sham control, in groups II, III, and IV defect was filled with 10, 20, and 40 μg concentrations of recombinant parathyroid hormone (PTH) respectively, in group V, the defect was filled with β-tricalcium phosphate (TCP) + hydroxyapatite (HA). The bone regeneration was assessed at 30 and 60 days, postoperatively by histopathology, histomorphometry, and radiographs. At the end of the experiment, a toxicity analysis was also done. Results: Histological evaluation showed trabecular bone formation in the groups that received parathormone derivative. Histomorphometry showed lesser inflammatory changes, better bone width, improved thickness of bone trabeculae, better bone quality, increased osteocyte count, and a higher percentage of new bone formation in group IV. The radiographs also showed improved bone regeneration in group IV. The serum biochemical parameters such as aspartate aminotransferase (AST), alanine aminotransferase (ALT), and creatine kinase (CK) showed significant alterations (p < 0.01) in all the treatment groups when compared to the control group. Conclusion: The results suggest that the local administration of recombinant parathormone derivative encouraged bone healing in critical-size calvarial defects in rats. The 40 μg concentration is found to be the most effective dosage with no associated organ toxicity. Clinical significance: Complete alveolar bone regeneration is still an elusive goal in periodontal therapy. Local application of recombinant parathormone derivative might have a promising role in periodontal regeneration.