Calcium phosphate‑based bone substitutes have been widely used for bone repair, augmentation and reconstruction in bone implant surgery. While some of these substitutes have shown excellent biological efficacy, there remains a need to improve the performance of the current calcium phosphate‑based bone substitutes. Strontium ions (Sr) can promote new osteogenesis, inhibit osteoclast formation and increase osteoconductivity. However, the therapeutic effect and mechanism of strontium‑containing α‑calcium sulfate hemihydrate (Sr‑CaS) remains unclear. The present study created bone injuries in rats and treated the injuries with Sr‑CaS. Then Cell Counting Kit‑8, soft agar colony formation, flow cytometry, Transwell and Alizarin Red staining assays were performed to assess the bone cells for their proliferation, growth, apoptosis, invasion, and osteogenic differentiation abilities. The bone reconstructive states were measured by the microCT method, hematoxylin and eosin staining and Masson staining. Bone‑related factors were analyzed by the reverse transcription‑quantitative PCR assay; transforming growth factor (TGF)‑β, mothers against decapentaplegic homolog (Smad)2/3 and β‑catenin expression was measured by western blot analysis and osteocalcin (OCN) expression was assessed by immunohistochemistry. Sr‑CaS did not significantly affect the proliferation and apoptosis of bone marrow stem cells (BMSCs), but did accelerate the migration and osteogenic differentiation of BMSCs in vitro. Sr‑CaS promoted bone repair and significantly increased the values for bone mineral density, bone volume fraction, and trabecular thickness, but decreased trabecular spacing in vivo in a concentration‑-dependent manner. In addition, Sr‑CaS dramatically upregulated the expression levels of genes associated with osteogenic differentiation (Runt‑related transcription factor 2, Osterix, ALP, OCN and bone sialoprotein) both in vitro and in vivo. Sr‑CaS also increased Smad2/3, TGF‑β and phosphorylated‑β‑catenin protein expression in vitro and in vivo. These results indicated that materials that contain 5 or 10% Sr can improve bone defects by regulating the TGF‑β/Smad signaling pathway.