Increasing evidence suggests that stromal cell-derived factor-1 (SDF-1/CXCL12) is involved in bone formation, though underlying molecular mechanisms remain to be fully elucidated. Also, contributions of SDF-1β, the second most abundant splice variant, as an osteogenic mediator remain obscure. We have shown that SDF-1β enhances osteogenesis by regulating bone morphogenetic protein-2 (BMP-2) signaling in vitro. Here we investigate the dose-dependent contribution of SDF-1β to suboptimal BMP-2-induced local bone formation; that is, a dose that alone would be too low to significantly induce bone formation. We utilized a critical-size rat calvarial defect model and tested the hypotheses that SDF-1β potentiates BMP-2 osteoinduction and that blocking SDF-1 signaling reduces the osteogenic potential of BMP-2 in vivo. In preliminary studies, radiographic analysis at 4 weeks postsurgery revealed a dose-dependent relationship in BMP-2-induced new bone formation. We then found that codelivery of SDF-1β potentiates suboptimal BMP-2 (0.5 μg) osteoinduction in a dose-dependent order, reaching comparable levels to the optimal BMP-2 dose (5.0 μg) without apparent adverse effects. Blocking the CXC chemokine receptor 4 (CXCR4)/SDF-1 signaling axis using AMD3100 attenuated the osteoinductive potential of the optimal BMP-2 dose, confirmed by qualitative histologic analysis. In conclusion, SDF-1β provides potent synergistic effects that support BMP-induced local bone formation and thus appears a suitable candidate for optimization of bone augmentation using significantly lower amounts of BMP-2 in spine, orthopedic, and craniofacial settings.