The current approach in biomaterial design of bone implants is to induce in situ regeneration of bone tissue, thus improving integration of the implants and reducing their failure. Therefore, ethyl-3,4-dihydroxybenzoate (EDHB), which stimulates differentiation of osteoblasts and the resultant bone formation, should be studied. In this study, the osteoinductive ability of EDHB in preosteoblasts and human mesenchymal stem cells was examined. EDHB for future use in bone tissue engineering was evaluated by examination of early markers of differentiation (such as alkaline phosphatase [ALP] activity and collagen type I expression) and late markers of osteoblast differentiation (bone nodule formation). As bone remodeling and implant osteointegration depend not only on osteoblast response but also on interaction of the biomaterial with bone-resorbing osteoclasts, differentiation of osteoclasts in response to the compounds was also observed. For in vivo study, alginate gel comprised of EDHB and cells was transplanted into the back subcutis of mice. Our results show that EDHB might have beneficial effects through regulation of both osteoblast and osteoclast differentiation. Therefore, we suggest that EDHB could be a strong candidate for dual regulation to increase osteoblast differentiation and decrease osteoclast differentiation.