The synthesis and SAR studies of 10 new chemical entities (NCEs) that have shown BMP-2 stimulation and osteoblast differentiation are reported. Among these, 2-((1-(benzyl(2-hydroxy-2-phenylethyl)amino)-1-oxo-3-phenylpropan-2-yl) carbamoyl)benzoic acid (11) was the most effective while its analogue 13 also showed good activity in inducing osteoblast BMP-2 production. Compound 11 induced osteoblast differentiation in vitro, and this effect was abrogated by a physiological BMP-2 inhibitor, noggin. It also exhibited dose dependent increase in nascent bone formation (2.16- and 3.12-fold more than the control at 1 and 5 mg/kg dose, respectively) at the fracture site in rats. At the maximum osteogenic concentration, compound 11 significantly inhibited osteoblastic proteosomal activity. This compound was safe, as it had no effect on BMP synthesis in cardiovascular tissue.