Failures in fracture healing are mainly caused by a lack of vascularization. Adult human circulating CD34+ cells, an endothelial/hematopoietic progenitor-enriched cell population, have been reported to differentiate into osteoblasts in vitro; however, the therapeutic potential of CD34+ cells for fracture healing is still unclear. Therefore, we performed a series of experiments to test our hypothesis that functional fracture healing is supported by vasculogenesis and osteogenesis via regenerative plasticity of CD34+ cells. Peripheral blood CD34+ cells, isolated from total mononuclear cells of adult human volunteers, showed gene expression of osteocalcin in 4 of 20 freshly isolated cells by single cell reverse transcriptase-polymerase chain reaction analysis. Phosphate-buffered saline, mononuclear cells, or CD34+ cells were intravenously transplanted after producing nonhealing femoral fractures in nude rats. Reverse transcriptase-polymerase chain reaction and immunohistochemical staining at the peri-fracture site demonstrated molecular and histological expression of human-specific markers for endothelial cells and osteoblasts at week 2. Functional bone healing assessed by biomechanical as well as radiological and histological examinations was significantly enhanced by CD34+ cell transplantation compared with the other groups. Our data suggest circulating human CD34+ cells have therapeutic potential to promote an environment conducive to neovascularization and osteogenesis in damaged skeletal tissue, allowing the complete healing of fractures.