Vertebral compression fractures related to osteoporosis greatly afflict the aging population. One of the most commonly used therapy today is balloon kyphoplasty. However, this treatment is far from ideal and is associated with significant side effects. NELL-1, an osteoinductive factor that possesses both pro-osteogenic and anti-osteoclastic properties, is a promising candidate for an alternative to current treatment modalities. This study utilizes the pro-osteogenic properties of recombinant human NELL-1 (rhNELL-1) in lumbar spine vertebral defect model in osteoporotic sheep.Osteoporosis was induced through ovariectomy, dietary depletion of calcium and vitamin D, and steroid administration. After osteoporotic induction, lumbar vertebral body defect creation was performed. Sheep were randomly implanted with the control vehicle, comprised of hyaluronic acid (HA) with hydroxyapatite-coated β-tricalcium phosphate (β-TCP), or the treatment material of rhNELL-1 protein lyophilized onto β-TCP mixed with HA. Analysis of lumbar spine defect healing was performed by radiographic, histologic, and computer-simulated biomechanical testing.rhNELL-1 treatment significantly increased lumbar spine bone formation, as determined by bone mineral density, % bone volume, and mean cortical width as assessed by micro-computed tomography. Histological analysis revealed a significant increase in bone area and osteoblast number and decrease in osteoclast number around the implant site. Computer-simulated biomechanical analysis of trabecular bone demonstrated that rhNELL-1-treatment resulted in a significantly more stress-resistant composition.Our findings suggest rhNELL-1-based vertebral implantation successfully improved cortical and cancellous bone regeneration in the lumbar spine of osteoporotic sheep. rhNELL-1-based bone graft substitutes represent a potential new local therapy.