Since the discovery of osteoinduction in the early 20th century, innovative biomaterials with osteoinductive potential have emerged. Over the last 50 years, however, our ability to describe biological phenomena accurately has been improved dramatically by advancements in cell and molecular biology. The aim of this review is to divide the osteoinduction phenomenon into 3 principles: (1) mesenchymal cell recruitment, (2) mesenchymal differentiation to bone-forming osteoblasts, and (3) ectopic bone formation in vivo. Furthermore, this review formulates guidelines for in vitro and in vivo experimental testing for accurately defining new biomaterials as osteoinductive. The use of growth factors with osteoinductive potential in periodontal and oral surgery is discussed. These concepts and guidelines aim to guide the future direction of emerging biomaterials in bone regeneration.