Blood stem cells depend on signals from the bone marrow microenvironment or “niche” for their survival. In clinical practice, hundreds of thousands of patients annually receive chemotherapy or radiation therapy in the treatment of cancer. Such therapies cause damage and death to blood stem cells and also damage the niche wherein stem cells reside. Stem cell regeneration is required for reconstitution of the blood and immune system following chemotherapy, radiation therapy or bone marrow transplantation. However, little is understood regarding the mechanisms that regulate blood stem cell regeneration. We hypothesized that bone progenitor cells regulate the regeneration of blood stem cells following injury. We found that bone progenitor cells secrete a protein called Dickkopf-1 (Dkk1) that promotes blood stem cell regeneration after irradiation. In mice, deletion of the Dkk1 gene in bone progenitor cells caused a significant delay in stem cell recovery and blood recovery after irradiation. Furthermore, treatment of irradiated mice with Dkk1 significantly accelerated stem cell regeneration and blood recovery after irradiation. Dkk1 promoted stem cell regeneration directly via inhibition of Wnt signaling in stem cells and suppression of ROS generation. Interestingly, Dkk1 also promoted stem cell regeneration indirectly by inducing the secretion of epidermal growth factor by bone marrow vascular endothelial cells. Taken together, these studies suggest that systemic administration of Dkk1 has therapeutic potential to accelerate blood and immune system recovery in patients receiving chemotherapy, radiation therapy or undergoing stem cell transplantation.