During bone remodelling, osteoclasts induce chemotaxis of osteoblasts and yet maintain spatial segregation. We show that osteoclasts express the repulsive guidance factor Semaphorin 4D and induce contact inhibition of locomotion (CIL) in osteoblasts through its receptor Plexin-B1. To examine causality and elucidate how localized Plexin-B1 stimulation may spatiotemporally coordinate its downstream targets in guiding cell migration, we develop an optogenetic tool for Plexin-B1 designated optoPlexin. Precise optoPlexin activation at the leading edge of migrating osteoblasts readily induces local retraction and, unexpectedly, distal protrusions to steer cells away. These morphological changes are accompanied by reorganization of Myosin II, PIP3, adhesion and active Cdc42. We attribute the resultant repolarization to RhoA/ROCK-mediated redistribution of β-Pix, which activates Cdc42 and promotes protrusion. Thus, our data demonstrate a causal role of Plexin-B1 for CIL in osteoblasts and reveals a previously unknown effect of Semaphorin signalling on spatial distribution of an activator of cell migration.