BMPs are used in various clinical applications to promote bone formation. The limited success of the BMPs in clinical settings and supraphysiological doses required for their effects prompted us to evaluate the influence of other signaling molecules, specifically platelet‐derived growth factor (PDGF) on BMP2‐induced osteogenesis. Periosteal cells make a major contribution to fracture healing. We detected broad expression of PDGF receptor beta (PDGFRβ) within the intact periosteum and healing callus during fracture repair. In vitro, periosteum‐derived progenitor cells were highly responsive to PDGF as demonstrated by increased proliferation and decreased apoptosis. However, PDGF blocked BMP2‐induced osteogenesis by inhibiting the canonical BMP2/Smad pathway and downstream target gene expression. This effect is mediated via PDGFRβ and involves ERK1/2 MAPK and PI3K/AKT signaling pathways. Therapeutic targeting of the PDGFRβ pathway in periosteum‐mediated bone repair might have profound implications in the treatment of bone disease in the future. © 2018 The Authors JBMR Plus is published by Wiley Periodicals, Inc. on behalf of the American Society for Bone and Mineral Research.