Bone-marrow aspirate (containing bone progenitor cells), in vitro expanded autologous bone-marrow-derived stromal fibroblastoid cells, and a combination thereof were tested for the potential to fill bone defects. They were compared to grafts of fresh autologous bone or allogeneic devitalized bone. Mandibular defects in rabbits were chosen for this study. The best results were obtained with a combination of in vitro expanded bone-marrow-derived stromal fibroblastoid cells and fresh autologous bone marrow or fresh autologous marrow alone. The effects of these two grafts were similar to grafts of fresh autologous bone and significantly superior to grafts of devitalized allogeneic bone providing only a bone matrix. The in vitro expanded marrow stromal cells induced very significant bone ingrowth, and their effects were only slightly inferior to fresh autologous bone but were superior to devitalized allogeneic bone. These studies suggest that bone marrow is a good source of osteogenic cells both for immediate transplantation and for in vitro expansion and subsequent transplantation.