This preclinical study evaluated the efficacy of purified recombinant human platelet-derived growth factor (rhPDGF-BB), combined with a novel equine hydroxyapatite and collagen (eHAC) bone block, in providing vertical bone regeneration in critical-size defects simulating localized mandibular alveolar bone atrophy. In addition, the impact of barrier membrane placement in growth factor-mediated bone regeneration was also studied. Bilateral posterior mandibular defects simulating severe localized bony atrophy were created in 12 adult foxhounds following removal of all four mandibular premolars. Three months later, the defects were grafted as follows: group A: eHAC block alone; group B: eHAC block + collagen membrane; group C: eHAC block + rhPDGF-BB; group D: eHAC block + rhPDGF-BB + membrane. The animals were sacrificed after 5 months and the grafted areas were examined histologically, radiographically, and clinically. Groups A and B (controls) exhibited little to no vertical bone regeneration. Group C demonstrated significant vertical bone regeneration, with dense, well-vascularized bone, high bone-to-implant contact, and accelerated replacement of graft particles with newly formed bone. In group D, with the imposition of a barrier membrane, robust bone regeneration was less evident when compared to group C. As in the first study in this series, the importance of the periosteum as a source of osteoprogenitor cells in growth factor-mediated regenerative procedures is examined.