Mesenchymal stem cells (MSCs) rely on chemokines and chemokine receptors to execute their biological and physiological functions. Stromal cell-derived factor-1 (SDF-1) is upregulated in injury sites, where it acts as a chemotactic agent, attracting CXCR4-expressing MSCs, which play a pivotal role in the healing and regeneration of tissue throughout the body. Furthermore, SDF-1 expression has been observed in regions experiencing inflammation-induced bone destruction and fracture sites. In this study, we identified a novel peptide called bone-forming peptide-5 (BFP-5), derived from SDF-1δ, which can promote the osteogenesis of MSCs as well as bone formation and healing. Multipotent bone marrow stromal cells treated with BFP-5 showed enhanced alizarin red S staining and higher alkaline phosphatase (ALP) activity. Moreover, ALP and osterix proteins were more abundantly expressed when cells were treated with BFP-5 than SDF-1α. Histology and microcomputed tomography data at 12 weeks demonstrated that both rabbit and goat models transplanted with polycaprolactone (PCL) scaffolds coated with BFP-5 showed significantly greater bone formation than animals transplanted with PCL scaffolds alone. These findings suggest that BFP-5 could be useful in the development of related therapies for conditions associated with bones.