Osteoporosis is common in patients undergoing spine surgery, and carries a considerable risk of adverse outcomes. New methods to positively influence bone regeneration and spine fusion under osteoporotic conditions would be impactful. Neutralizing anti–Dickkopf-1 (DKK1) antibodies has been used as a bone anabolic agent, and recently reported by our group to aid in stem cell-mediated appendicular bone regeneration. Here, a small molecule designed as a DKK1 inhibitor, WAY-262611, was used to induce posterolateral spine fusion in an ovariectomized rat model. In vitro, pharmacological inhibition of DKK1 enhanced osteogenesis and Wnt signaling activity among rat bone marrow-derived stem/stromal cells (BMSCs). In vivo, systemic treatment with WAY-262611 promoted both chondrogenesis and osteogenesis within the spinal fusion site, and ultimately led to significant improvements in lumbar fusion as assessed by XR, μCT, histology and manual palpation assessments. No significant effect on osteoclast numbers or fusion site angiogenesis was detected, suggesting a primary direct effect on mesenchymal cells of the implantation site. Finally, evidence from human stem/stromal cells further demonstrated that pharmacologic inhibition of DKK1 promoted osteogenic differentiation in vitro. Taken together, our results suggest that targeting DKK1 promotes local bone formation and suggests potential clinical value for osteoporotic bone repair.