Thyroid hormone (TH) is essential for vertebrate development and the homeostasis of most adult tissues, including bone. TH stimulates target gene expression through the nuclear thyroid receptors TRα and TRβ; however, TH also has rapid, transcription-independent (nongenomic) effects. We found a previously uncharacterized plasma membrane–bound receptor that was necessary and sufficient for nongenomic TH signaling in several cell types. We determined that this receptor is generated by translation initiation from an internal methionine of TRα, which produces a transcriptionally incompetent protein that is palmitoylated and associates with caveolin-containing plasma membrane domains. TH signaling through this receptor stimulated a pro-proliferative and pro-survival program by increasing the intracellular concentrations of calcium, nitric oxide (NO), and cyclic guanosine monophosphate (cGMP), which led to the sequential activation of protein kinase G II (PKGII), the tyrosine kinase Src, and extracellular signal–regulated kinase (ERK) and Akt signaling. Hypothyroid mice exhibited a cGMP-deficient state with impaired bone formation and increased apoptosis of osteocytes, which was rescued by a direct stimulator of guanylate cyclase. Our results link nongenomic TH signaling to a previously uncharacterized membrane-bound receptor, and identify NO synthase, guanylate cyclase, and PKGII as TH effectors that activate kinase cascades to regulate cell survival and proliferation.