Objective. Stromal cell-derived factor 1 (SDF-1; CXCL12/pre-B cell growth-stimulating factor) is a dominant chemokine in bone marrow and is known to be involved in inflammatory diseases, including rheumatoid arthritis. However, its role in bone repair remains unknown. The purpose of this study was to investigate the role of SDF-1 and its receptor, CXCR4, in bone healing.Methods. The expression of SDF-1 during the repair of a murine structural femoral bone graft was examined by real-time polymerase chain reaction and immunohistochemical analysis. The bone graft model was treated with anti-SDF-1 neutralizing antibody or TF14016, an antagonist for CXCR4, and evaluated by histomorphometry. The functional effect of SDF-1 on primary mesenchymal stem cells was determined by in vitro and in vivo migration assays. New bone formation in an exchanging-graft model was compared with that in the autograft models, using mice partially lacking SDF-1 (SDF-1 ؉/؊ ) or CXCR4 (CXCR4 ؉/؊ ).Results. The expression of SDF1 messenger RNA was increased during the healing of live bone grafts but was not increased in dead grafts. High expression of SDF-1 protein was observed in the periosteum of the live graft. New bone formation was inhibited by the administration of anti-SDF-1 antibody or TF14016. SDF-1 increased mesenchymal stem cell chemotaxis in vitro in a dose-dependent manner. The in vivo migration study demonstrated that mesenchymal stem cells recruited by SDF-1 participate in endochondral bone repair. Bone formation was decreased in SDF-1 ؉/؊ and CXCR4 ؉/؊ mice and was restored by the graft bones from CXCR4 ؉/؊ mice transplanted into the SDF-1 ؉/؊ femur, but not vice versa.Conclusion. SDF-1 is induced in the periosteum of injured bone and promotes endochondral bone repair by recruiting mesenchymal stem cells to the site of injury.