The interplay between bone-forming osteoblasts and bone-resorbing osteoclasts is essential for balanced bone remodeling. In this study, we evaluate the ability of ethyl-2, 5-dihyrdoxybenzoate (E-2, 5-DHB) to affect both osteoblast and osteodast differentiation for bone regeneration. Osteogenic differentiation of human mesenchymal stem cells (hMSCs) was quantified by measuring alkaline phosphatase (ALP) activity and calcium deposition. To evaluate osteoclast differentiation, we investigated the effect of E-2, 5-DHB on RANKL-activated osteoclastogenesis in RAW 264.7 cells. E-2, 5-DHB enhanced ALP activity and inhibited RAW 264.7 cell osteoclastogenesis in vitro. To assess the in vivo activity of E-2, 5-DHB, hMSCs were delivered subcutaneosuly alone or in combination with E-2, 5-DHB in an alginate gel into the backs of nude-mice. Histological and immunohistochemical evaluation showed significantly higher calcium deposition in the E-2, 5-DHB group. Osteocalcin (OCN) was highly expressed in cells implanted in the gels containing E-2, 5-DHB. Our results suggest that E-2, 5-DHB can effectively enhance osteoblast differentiation and inhibit osteoclast differentiation both in vitro and in vivo. Understanding the dual function of E-2, 5-DHB on osteoblast and osteoclast differentiation will aid in future development of E-2, 5-DHB as a material for bone tissue engineering. (C) 2016 Elsevier Inc. All rights reserved.