Bone marrow mesenchymal stem/stromal cells (BMSCs) show great promise for bone repair, however they are isolated by an invasive bone marrow harvest and their regenerative potential decreases with age. Conversely, cord blood can be collected non-invasively after birth and contains MSCs (CBMSCs) that can be stored for future use. However, whether CBMSCs can replace BMSCs targeting bone repair is unknown. This study evaluates the in vitro osteogenic potential of unprimed, osteogenically primed, or chondrogenically primed CBMSCs and BMSCs and their in vivo bone forming capacity following ectopic implantation on biphasic calcium phosphate ceramics in nude mice. In vitro, alkaline phosphatase (intracellular, extracellular, and gene expression), and secretion of osteogenic cytokines (osteoprotegerin and osteocalcin) was significantly higher in BMSCs compared with CBMSCs, while CBMSCs demonstrated superior chondrogenic differentiation and secretion of interleukins IL-6 and IL-8. BMSCs yielded significantly more cell engraftment and ectopic bone formation compared to CBMSCs. However, priming of CBMSCs with either chondrogenic or BMP-4 supplements led to bone formation by CBMSCs. This study is the first direct quantification of the bone forming abilities of BMSCs and CBMSCs in vivo and, while revealing the innate superiority of BMSCs for bone repair, it provides avenues to induce osteogenesis by CBMSCs.