Cysteine knot proteins (CKPs) with cysteine-rich domain mainly inhibit bone formation induced by Bone morphogenetic protein (BMP). We identified a novel CKP, von Willebrand factor C domain containing 2 (VWC2), and investigated the effect of VWC2 on bone formation. When VWC2 was added to MC3T3-E1 osteoblastic cell culture, the extent of matrix mineralization and alkaline phosphatase activity were significantly increased. The newly formed bone area was increased and mineral apposition rate was enhanced by VWC2 when applied to mouse cranial bone defect in vivo. VWC2 addition also increased the expression of key osteogenic markers Osterix and Runt-related transcription factor 2 (Runx2) in primary osteoblast cells. In conclusion, VWC2 positively regulates bone formation possibly through Osterix and Runx2 upregulation.