Distraction osteogenesis (DO) is a well-established surgical technique for treating bone defect and limb lengthening. The major drawback of DO is the long treatment period as the external fixator has to be kept in place until consolidation is completed. Calcitonin gene-related peptide (CGRP) has been reported to promote angiogenesis by affecting endothelial progenitor cells (EPCs) in limb ischemia and wound healing. Thus, the goal of this study was to evaluate the angiogenic effect of exogenous CGRP on bone regeneration in a rat DO model. Exogenous CGRP was directly injected into the bone defect after each cycle of distraction in vivo. Microcomputed tomography, biomechanical test, and histological analysis were performed to assess the new bone formation. Angiography and immunofluorescence were performed to assess the formation of blood vessels. CD31+CD144+ EPCs in the bone defect were quantified with flow cytometry. In in vitro study, bone marrow stem cells (BMSCs) were used to investigate the effect of CGRP on EPCs production during endothelial differentiation. Our results showed that CGRP significantly promoted bone regeneration and vessel formation after consolidation. CGRP significantly increased the fraction of CD31+CD144+EPCs and the capillary density in the bone defect at the end of distraction phase. CGRP increased EPC population in the endothelial differentiation of BMSCs in vitro by activating PI3K/AKT signaling pathway. Furthermore, differentiated EPCs rapidly assembled into tube-like structures and promoted osteogenic differentiation of BMSCs. In conclusion, CGRP increased EPC population and promoted blood vessel formation and bone regeneration at the defect region in a DO model. Impact statement Distraction osteogenesis (DO) is a well-established surgical technique for limb lengthening and bone defect. The disadvantage of this technique is that external fixator is needed to be kept in place for about 12 months. This may result in increased risk of infection, financial burden, and negative psychological impacts. In this study, we have injected calcitonin gene-related peptide (CGRP) into the defect region after distraction and found that CGRP enhanced vessel formation and bone regeneration in a rat DO model. This suggests that a controlled delivery system for CGRP could be developed and applied clinically for accelerating bone regeneration in patients with DO.