Gushukang (GSK) is a traditional herbal compound used in Chinese medicine for the treatment of osteoporosis. Numerous studies have been conducted to elucidate the effects of GSK, but the mechanisms underlying these effects remain unclear. In the present study, we cultured osteoblasts and osteoclasts with low and high doses of GSK, and also administered 3-month-old mice with 4 and 8 g/kg/day of GSK solution. Gushukang was found to promote osteoblast differentiation and inhibit osteoclast differentiation in vitro. In vivo, mice in the GSK treatment groups showed an increase in bone mass, as measured by micro-computed tomography (Micro-CT). Tartrate resistant acid phosphatase (TRAP) staining and osteocalcin (OCN) staining experiments revealed decreased bone resorption and increased bone formation in the GSK treatment groups. In addition, we found a novel effect of GSK-it could induce type-H vessel formation in mice. The underlying mechanisms of these actions were further explored at the molecular level to investigate whether these effects were due to an overexpression of the hypoxia inducible factor-1 (HIF-1α). Our findings indicate the utility of GSK as a therapeutic for the prevention of osteoporosis.