An emerging strategy in the regeneration and repair of bone is to use stem cells, including bone marrow mesenchymal stem cells, which are the most investigated and reliable source for tissue engineering, as well as circulating skeletal stem/progenitor cells, which are receiving abundant attention in regenerative medicine due to their ease of isolation and high osteogenic potential. Because failures in fracture healing are largely due to poor vascularization among many environmental factors, we highlight the first proof-of-principle experiments that elucidated the collaborative multi-lineage differentiation of circulating CD34 positive cells - a cell-enriched population of endothelial/hematopoietic progenitor cells - into not only endothelial cells but also osteoblasts. These cells develop a favorable environment for fracture healing via vasculogenesis/angiogenesis and osteogenesis, ultimately leading to functional recovery from fracture. This review will also highlight current concepts of circulating stem/progenitor cell-based therapy and their potential application for bone repair.