Classic embryological studies have documented the inductive role of root dentin on adjacent periodontal ligament differentiation. The biochemical composition of root dentin includes collagens and cleavage products of dentin sialophosphoprotein (DSPP), such as dentin sialoprotein (DSP). The high abundance of DSP in root dentin prompted us to ask the question whether DSP or peptides derived thereof would serve as potent biological matrix components to induce periodontal progenitors to further differentiate into periodontal ligament cells. Here, we test the hypothesis that domain of DSP influences cell fate. In situ hybridization and immunohistochemical analyses showed that the COOH-terminal DSP domain is expressed in mouse periodontium at various stages of root development. The recombinant COOH-terminal DSP fragment (rC-DSP) enhanced attachment and migration of human periodontal ligament stem cells (PDLSC), human primary PDL cells without cell toxicity. rC-DSP induced PDLSC cell proliferation as well as differentiation and mineralization of PDLSC and PDL cells by formation of mineralized tissue and ALPase activity. Effect of rC-DSP on cell proliferation and differentiation was to promote gene expression of tooth/bone-relate markers, transcription factors and growth factors. The results for the first time showed that rC-DSP may be one of the components of cell niche for stimulating stem/progenitor cell proliferation and differentiation and a natural scaffold for periodontal regeneration application.