Skeletal tissue regeneration requires the interaction of three basic biologic elements: cells, growth and differentiation factors, and extracellular matrix scaffolds. Therapeutic approaches for tissue engineered repair of bone defects have attempted to mimic the natural process of bone repair by delivering a source of cells capable of differentiating into osteoblasts, inductive growth and differentiation factors, or bioresorbable scaffolding matrices to support cellular attachment, migration, and proliferation. Sophisticated designs even have tried to combine two or more of these elements. The development of cell based approaches has advanced dramatically in recent years as an understanding of musculoskeletal cell biology improves. Cell based approaches do not depend on the presence of local osteoprogenitors for the synthesis of new bone and, as a result, they particularly are attractive for patients who have a diminished pool of these progenitors, or in whom the host tissue bed has been compromised. This review highlights the development of cell based approaches for the tissue engineering of bone, and offers perspectives on the optimal elements for success. Although logistical and regulatory issues remain to be solved, cell based therapies for the repair of clinically significant bone defects rapidly are approaching clinical feasibility.