Introduction: Mesenchymal stem and progenitor cells (MSCs), which normally reside in the bone marrow, are critical to bone health and can be recruited to sites of traumatic bone injury, contributing to new bone formation. The ability to control the trafficking of MSCs provides therapeutic potential for improving traumatic bone healing and therapy for genetic bone diseases such as hypophosphatasia. Methods: In this study, we explored the sphingosine-1-phosphate (S1P) signaling axis as a means to control the mobilization of MSCs into blood and possibly to recruit MSCs for enhancing bone growth. Results: Loss of S1P receptor 3 (S1PR3) leads to an increase in circulating CD45−/CD29+/CD90+/Sca1+ putative mesenchymal progenitor cells, suggesting that blocking S1PR3 may stimulate MSCs to leave the bone marrow. Antagonism of S1PR3 with the small molecule VPC01091 stimulated acute migration of CD45−/CD29+/CD90+/Sca1+ MSCs into the blood as early as 1.5 h after treatment. VPC01091 administration also increased ectopic bone formation induced by BMP-2 and significantly increased new bone formation in critically sized rat cranial defects, suggesting that mobilized MSCs may home to injuries to contribute to healing. We also explored the possibility of combining S1P manipulation of endogenous host cell occupancy with exogenous MSC transplantation for potential use in combination therapies. Importantly, reducing niche occupancy of host MSCs with VPC01091 does not impede engraftment of exogenous MSCs. Conclusions: Our studies suggest that MSC mobilization through S1PR3 antagonism is a promising strategy for endogenous tissue engineering and improving MSC delivery to treat bone diseases.