Insufficient bone fracture repair represents a major clinical and societal burden and novel strategies are needed to address it. Our data reveal that the transforming growth factor-β superfamily member Activin A became very abundant during mouse and human bone fracture healing but was minimally detectable in intact bones. Single-cell RNA-sequencing revealed that the Activin A-encoding gene Inhba was highly expressed in a unique, highly proliferative progenitor cell (PPC) population with a myofibroblast character that quickly emerged after fracture and represented the center of a developmental trajectory bifurcation producing cartilage and bone cells within callus. Systemic administration of neutralizing Activin A antibody inhibited bone healing. In contrast, a single recombinant Activin A implantation at fracture site in young and aged mice boosted: PPC numbers; phosphorylated SMAD2 signaling levels; and bone repair and mechanical properties in endochondral and intramembranous healing models. Activin A directly stimulated myofibroblastic differentiation, chondrogenesis and osteogenesis in periosteal mesenchymal progenitor culture. Our data identify a distinct population of Activin A-expressing PPCs central to fracture healing and establish Activin A as a potential new therapeutic tool.