We examined whether transplantation of autologous bone marrow mononuclear cells (BM-MNCs) can augment neovascularization and bone regeneration of bone marrow in femoral bone defects of rabbits. Gelatin microspheres containing basic fibroblast growth factor (bFGF) were prepared for the controlled release of bFGF. To evaluate the in vivo effect of implanted BM-MNCs, we created bone defects in the rabbit medial femoral condyle, and implanted into them 5 x 10(6) fluorescent-labeled autologous BM-MNCs together with gelatin microspheres containing 10 mu g bFGF on an atelocollagen gel scaffold. The four experimental groups, which were Atelocollagen gel (Cot), Cot + 5 x 10(6) BM-MNCs, Cot + 10 mu g bFGF, and Cot + 5 x 10(6) BM-MNCs + 10 mu g bFGF, were implanted into the sites of the prepared defects using Atelocollagen gel as a scaffold. The autologous BM-MNCs expressed CD31, an endothelial lineage cell marker, and induced efficient neovascularization at the implanted site 2 weeks after implantation. Capillary density in Col + BM-MNCs + bFGF was significantly large compared with other groups. This combination also enhanced regeneration of the bone defect after 8 weeks to a significantly greater extent than either BM-MNCs or bFGF on their own. In summary, these findings demonstrate that a combination of BM-MNCs and bFGF gelatin hydrogel enhance the neovascularization and the osteoinductive ability, resulting in bone regeneration. (c) 2004 Elsevier Ltd. All rights reserved.