BACKGROUND Techniques used to repair craniofacial skeletal defects parallel the accepted surgical therapies for bone loss elsewhere in the skeleton and include the use of autogenous bone and alloplastic materials. Transplantation of a bone marrow stromal cell population that contains osteogenic progenitor cells may be an additional modality for the generation of new bone. METHODS Full thickness osseous defects (5 mm) were prepared in the cranium of immunocompromised mice and were treated with gelatin sponges containing murine alloplastic bone marrow stromal cells derived from transgenic mice carrying a type I collagen-chloramphenicol acetyltransferase reporter gene to follow the fate of the transplanted cells. Control surgical sites were treated with spleen stromal cells or gelatin sponges alone, or were left untreated. The surgical defects were analyzed histologically for percent closure of the defect at 2, 3, 4, 6, and 12 weeks. RESULTS Cultured bone marrow stromal cells transplanted within gelatin sponges resulted in osteogenesis that repaired greater than 99.0+/-2.20% of the original surgical defect within 2 weeks. In contrast, cranial defects treated with splenic fibroblasts, vehicle alone, or sham-operated controls resulted in minimal repair that was limited to the surgical margins. Bone marrow stromal cells carrying the collagen transgene were immunodetected only in the newly formed bone and thus confirmed the donor origin of the transplanted cells. CONCLUSIONS These studies demonstrate that mitotically expanded bone marrow cells can serve as an abundant source of osteoprogenitor cells that are capable of repairing craniofacial skeletal defects in mice without the addition of growth or morphogenetic factors.