Approximately 10% of fractures that occur in the United States annually will not heal without intervention. This figure is rising due to an aging population and a rise in conditions that impair bone healing. Current treatments can be marginally effective, costly, and some have adverse effects. A safe and manufacturable material that mimics anabolic bone is the holy grail of bone tissue engineering, but achieving this is challenging. Adult stem cells, especially mesenchymal stem cells (MSCs), are excellent candidates for engineering bone, but the lack of reproducibility due to donor variation and culture protocols have hindered progress in this area. Herein, we describe an MSC line generated from induced pluripotent stem cells with remarkable osteogenic properties. The cells can be induced to generate large amounts of osteogenic extracellular matrix (ihMatrix) under monolayer culture conditions. When pure ihMatrix is implanted into calvarial defects in mice, it has intrinsic osteogenic activity that significantly surpasses the efficacy of bone morphogenic protein 2 resulting in complete healing of defects in 4 weeks through a mechanism of action mediated in part by collagen VI and XII. Based on these findings, we propose that ihMatrix could represent a superior replacement for the current gold standards, autograft and BMP products, used commonly in bone tissue engineering.