The capacity for tissues to repair and regenerate diminishes with age. We sought to determine the age-dependent contribution of native mesenchymal cells and circulating factors on in vivo bone repair. Here we show that exposure to youthful circulation by heterochronic parabiosis reverses the aged fracture repair phenotype and the diminished osteoblastic differentiation capacity of old animals. This rejuvenation effect is recapitulated by engraftment of young haematopoietic cells into old animals. During rejuvenation, β-catenin signalling, a pathway important in osteoblast differentiation, is modulated in the early repair process and required for rejuvenation of the aged phenotype. Temporal reduction of β-catenin signalling during early fracture repair improves bone healing in old mice. Our data indicate that young haematopoietic cells have the capacity to rejuvenate bone repair and this is mediated at least in part through β-catenin, raising the possibility that agents that modulate β-catenin can improve the pace or quality of fracture repair in the ageing population.