In this work, substituted benzothiophene and benzofuran compounds were found to be a new class of potential anabolic agents by enhancing BMP-2 expression. A series of benzothiophene and benzofuran derivatives have been synthesized, and their activities of up-regulating BMP-2 and bone loss prevention efficacies in SAMP6 mice and OVX rats have been studied. Benzothiophenes 1, 3, 14, 4a, 7a, 8a, and benzofuran analogue 2 showed higher BMP-2 up-regulation rates in vitro. Compound 8a was found to significantly affect the bone formation rate of tested SAMP6 mice. Compound 1 showed an improved bone quality in SAMP6 mice and also showed activity in OVX rats. We have demonstrated that substituted benzothiophene and benzofuran derivatives, especially compounds 1 and 8a, enhance BMP-2 expression in vitro and in vivo and stimulate bone formation and trabecular connectivity restoration in vivo. The compounds represent potential leads in the development of a new class of anabolic agents.