Stem cell therapy of skeletal tissues involves the transplantation of stem cells to the tissues that have been damaged by injury or disease. Although these cells can be derived from embryos, the preferred source of skeletal stem cells is the bone marrow as it contains adult stem cells that can be easily driven towards a bone phenotype. More recently, cells with similar potentialities have also been derived from adipose tissue, muscle, or blood. A biomaterial (ceramics or polymers) is often required as a scaffold to promote cell adhesion, proliferation and differentiation as well as encourage vascular invasion and ultimately new bone formation. The first clinical studies are encouraging and suggests that stem cell therapy could be a prime method for bone reconstruction.