The regeneration of large bone defects remains an unsolved clinical problem, which could benefit from recent findings on the biology of skeletal stem and progenitor cells. The elucidation of conditions to specifically control their dynamic and function will likely enable the development of novel treatment strategies. In this study, we aimed at dissecting the role of osteogenic cues and skeletal stem (SSC) and progenitor cell (BCSP) recruitment during biomimetic hydrogel-assisted bone regeneration. To do so, we employed a biomimetic synthetic hydrogel based on poly (ethylene glycol) (PEG), highly controllable and enzymatically crosslinkable. We show that hydrogel-released bone morphogenetic protein-2 (BMP-2) dose-dependently promoted the enrichment of both SSCs and BCSPs within bone defects. Furthermore, we demonstrate that prospectively isolated neonatal bone-derived, as well as expanded SSCs and BCSPs, differentiate into osteogenic cells and enhance the healing of bone defects by low BMP-2 releasing biomaterials. These results indicate that growth factor releasing materials should be designed to first augment the number of SSCs and BCSPs, followed by their osteogenic differentiation to potentiate the healing of bone defects. Additionally, we demonstrate that expanded SSCs and BCSPs are easily accessible cell sources that allow the study of novel bone healing regimen under controlled in vitro and in vivo conditions.