The present invention provides compositions and methods for differentiating a stem cell into an osteoblast or osteoblast progenitor cell. In certain embodiments, the invention may be used for promoting bone formation and increasing bone mass. In one embodiment, the composition comprises an agent which increases PEDF expression, PEDF activity, or both. In one embodiment, the composition comprises full-length PEDF. In one embodiment, the composition comprises a PEDF fragment or PEDF-derived peptide.