Each year, 33% of US citizens suffer from a musculoskeletal condition that requires medical intervention, with direct medical costs approaching $1 trillion USD per year. Despite the ubiquity of skeletal dysfunction, there are currently limited safe and efficacious bone growth factors in clinical use. Notch is a cell-cell communication pathway that regulates self-renewal and differentiation within the mesenchymal/osteoblast lineage. The principal Notch ligand in bone, Jagged-1, is a potent osteoinductive protein that positively regulates post-traumatic bone healing in animals. This report describes the temporal regulation of Notch during intramembranous bone formation using marrow ablation as a model system and demonstrates decreased bone formation following disruption of Jagged-1 in mesenchymal progenitor cells. Notch gain-of-function using recombinant Jagged-1 protein on collagen scaffolds promotes healing of craniofacial (calvarial) and appendicular (femoral) surgical defects in both mice and rats. Localized delivery of Jagged-1 promotes bone apposition and defect healing, while avoiding the diffuse bone hypertrophy characteristic of the clinically problematic bone morphogenetic proteins. It is concluded that Jagged-1 is a bone-anabolic agent with therapeutic potential for regenerating traumatic or congenital bone defects.