NELL-1 is a secreted, osteogenic protein first discovered to control ossification of the cranial skeleton. Recently, NELL-1 has been implicated in bone maintenance. However, the cellular determinants of NELL-1's bone-forming effects are still unknown. Here, recombinant human NELL-1 (rhNELL-1) implantation was examined in a clinically relevant nonhuman primate lumbar spinal fusion model. Prolonged rhNELL-1 protein release was achieved using an apatite-coated β-tricalcium phosphate carrier, resulting in a local influx of stem cell antigen-1-positive (Sca-1+) mesenchymal progenitor cells (MPCs), and complete osseous fusion across all samples (100% spinal fusion rate). Murine studies revealed that Nell-1 haploinsufficiency results in marked reductions in the numbers of Sca-1+CD45-CD31- bone marrow MPCs associated with low bone mass. Conversely, rhNELL-1 systemic administration in mice showed a marked anabolic effect accompanied by increased numbers of Sca-1+CD45-CD31- bone marrow MPCs. Mechanistically, rhNELL-1 induces Sca-1 transcription among MPCs, in a process requiring intact Wnt/β-catenin signaling. In summary, NELL-1 effectively induces bone formation across small and large animal models either via local implantation or intravenous delivery. NELL-1 induces an expansion of a bone marrow subset of MPCs with Sca-1 expression. These findings provide compelling justification for the clinical translation of a NELL-1-based therapy for local or systemic bone formation.