BACKGROUND Bone tissue engineering is an area of continued interest within orthopaedic surgery, as it promises to create implantable bone substitute materials that obviate the need for autologous bone graft. Recently, oxysterols – oxygenated derivatives of cholesterol – have been proposed as a novel class of osteoinductive small molecules for bone tissue engineering. Here, we present the first systematic review of the in vivo evidence describing the potential therapeutic utility of oxysterols for bone tissue engineering. AIM To systematically review the available literature examining the effect of oxysterols on in vivo bone formation. METHODS We conducted a systematic review of the literature following PRISMA guidelines. Using the PubMed/MEDLINE, Embase, and Web of Science databases, we queried all publications in the English-language literature investigating the effect of oxysterols on in vivo bone formation. Articles were screened for eligibility using PICOS criteria and assessed for potential bias using an expanded version of the SYRCLE Risk of Bias assessment tool. All full-text articles examining the effect of oxysterols on in vivo bone formation were included. Extracted data included: Animal species, surgical/defect model, description of therapeutic and control treatments, and method for assessing bone growth. Primary outcome was fusion rate for spinal fusion models and percent bone regeneration for critical-sized defect models. Data were tabulated and described by both surgical/defect model and oxysterol employed. Additionally, data from all included studies were aggregated to posit the mechanism by which oxysterols may mediate in vivo bone formation. RESULTS Our search identified 267 unique articles, of which 27 underwent full-text review. Thirteen studies (all preclinical) met our inclusion/exclusion criteria. Of the 13 included studies, 5 employed spinal fusion models, 2 employed critical-sized alveolar defect models, and 6 employed critical-sized calvarial defect models. Based upon SYRCLE criteria, the included studies were found to possess an overall “unclear risk of bias”; 54% of studies reported treatment randomization and 38% reported blinding at any level. Overall, seven unique oxysterols were evaluated: 20( S )-hydroxycholesterol, 22( R )-hydroxycholesterol, 22( S )-hydroxycholesterol, Oxy4/Oxy34, Oxy18, Oxy21/Oxy133, and Oxy49. All had statistically significant in vivo osteoinductive properties, with Oxy4/Oxy34, Oxy21/Oxy133, and Oxy49 showing a dose-dependent effect in some cases. In the eight studies that directly compared oxysterols to rhBMP-2-treated animals, similar rates of bone growth occurred in the two groups. Biochemical investigation of these effects suggests that they may be primarily mediated by direct activation of Smoothened in the Hedgehog signaling pathway. CONCLUSION Present preclinical evidence suggests oxysterols significantly augment in vivo bone formation. However, clinical trials are necessary to determine which have the greatest therapeutic potential for orthopaedic surgery patients.