Insulin-like growth factor-binding protein 2 (IGFBP-2) is a member of a family of six highly conserved IGFBPs that are carriers for the insulin-like growth factors (IGFs). IGFBP-2 levels rise during rapid neonatal growth and at the time of peak bone acquisition. In contrast, Igfbp2(-/-) mice have low bone mass accompanied by reduced osteoblast numbers, low bone formation rates, and increased PTEN expression. In the current study, we postulated that IGFBP-2 increased bone mass partly through the activity of its heparin-binding domain (HBD). We synthesized a HBD peptide specific for IGFBP-2 and demonstrated in vitro that it rescued the mineralization phenotype of Igfbp2(-/-) bone marrow stromal cells and calvarial osteoblasts. Consistent with its cellular actions, the HBD peptide ex vivo stimulated metacarpal periosteal expansion. Furthermore, administration of HBD peptide to Igfbp2(-/-) mice increased osteoblast number, suppressed marrow adipogenesis, restored trabecular bone mass, and reduced bone resorption. Skeletal rescue in the Igfbp2(-/-) mice was characterized by reduced PTEN expression followed by enhanced Akt phosphorylation in response to IGF-I and increased β-catenin signaling through two mechanisms: 1) stimulation of its cytosolic accumulation and 2) increased phosphorylation of serine 552. We conclude that the HBD peptide of IGFBP-2 has anabolic activity by activating IGF-I/Akt and β-catenin signaling pathways. These data support a growing body of evidence that IGFBP-2 is not just a transport protein but rather that it functions coordinately with IGF-I to stimulate growth and skeletal acquisition.