? 2016 Wiley Periodicals, Inc. Considering the increased interest in cell-based bone regeneration, it is necessary to reveal the fate of transplanted cells and their substantive roles in bone regeneration. The aim of this study was to analyze the fate of transplanted cells and the effect of osteogenic cell transplantation on calvarial bone defect healing. An anti-apoptotic protein, heat shock protein (HSP) 27, was overexpressed in osteoblasts. Then, the treated osteoblasts were transplanted to calvarial bone defect and their fate was analyzed to evaluate the significance of transplanted cell survival. Transient overexpression of Hsp27 rescued MC3T3-E1 osteoblastic cells from H2O2-induced apoptosis without affecting osteoblastic differentiation in culture. Transplantation of Hsp27-overexpressing cells, encapsulated in collagen gel, showed higher proliferative activity, and fewer apoptotic cells in comparison with control cells. After 4-week of transplantation, both control cell- and Hsp27 overexpressed cell-transplanted groups showed significantly higher new bone formation in comparison with cell-free gel-transplantation group. Interestingly, the prolonged survival of transplanted osteoblastic cells by Hsp27 did not provide additional effect on bone healing. The transplanted cells in collagen gel survived for up to 4-week but did not differentiate into bone-forming osteoblasts. In conclusion, cell-containing collagen gel accelerated calvarial bone defect healing in comparison with cell-free collagen gel. However, prolonged survival of transplanted cells by Hsp27 overexpression did not provide additional effect. These results strongly indicate that cell transplantation-based bone regeneration cannot be explained only by the increment of osteogenic cells. Further studies are needed to elucidate the practical roles of transplanted cells that will potentiate successful bone regeneration. J. Cell. Physiol. 231: 1974-1982, 2016.