Osteoblast differentiation is regulated through the successive activation of signaling molecules by a complex interplay of extracellular signals such as bone morphogenetic protein (BMP) and Wnt ligands. Numerous studies have identified natural as well as synthetic compounds with osteogenic activity through the regulation of either BMP/SMADs or the Wnt/β-catenin pathway. Here, we attempted to isolate small molecules that concurrently activated both SMADs and β-catenin, which led to the discovery of a novel potent osteogenic compound, DMP-PYT. Upon BMP2 stimulation, DMP-PYT substantially increased osteoblast differentiation featured by enhanced expression of osteoblast-specific genes and accelerated calcification through activation of BMPs expression. DMP-PYT promoted BMP2-induced SMAD1/5/8 phosphorylation and β-catenin expression, the latter in a BMP2-independent manner. DMP-PYT alone enhanced nuclear localization of β-catenin to promote the DNA-binding and transcriptional activity of T-cell factor, thereby resulting in increased osteoblast differentiation in the absence of BMP2. Most importantly, DMP-PYT advanced skeletal development and bone calcification in zebrafish larvae. Conclusively, DMP-PYT strongly stimulated osteoblast differentiation and bone formation in vitro and in vivo by potentiating BMP2-induced activation of SMADs and β-catenin. These results suggest that DMP-PYT may have beneficial effects for preventing and for treating osteoporosis.