Distraction osteogenesis for the augmentation of severe alveolar bone deficiency has gained popularity during the past two decades. In cases where the vertical bone height is not sufficient to create a stable transport segment, performing alveolar distraction osteogenesis (ADO) is not possible. In these severe cases, a two-stage treatment protocol is suggested: onlay bone grafting followed by ADO. An iliac crest onlay bone graft followed by ADO was performed in 13 patients: seven in the mandible and six in the maxilla. Following ADO, endosseous implants and prosthetic restorations were placed. In all cases, the onlay bone graft resulted in inadequate height for implant placement, but allowed ADO to be performed. ADO was performed to a mean total vertical augmentation of 13.7mm. Fifty-two endosseous implants were placed. During a mean follow-up of 4.85 years, two implants failed, both during the first 6 months; the survival rate was 96.15%. In severe cases lacking the required bone for ADO, using an onlay bone graft as a first stage treatment increases the bone height thus allowing ADO to be performed. This article describes a safe and stable two-stage treatment modality for severely atrophic cases, resulting in sufficient bone for implant placement and correction of the inter-maxillary vertical relationship.