Bone tissue can be fabricated by in vivo transplantation of syngeneic marrow cells/porous hydroxyapatite ceramic composites into heterotopic sites. The new bone tissue is recognized by histological sections, as well as biochemical findings of high alkaline phosphatase (ALP) activity and the appearance of bone specific osteocalcin molecule. Bone formation is initialed by osteoblastic differentiation of marrow mesenchymal stem cells (MSCs) that reside in bone marrow In contrast, neither of the mismatched major or minor allogeneic marrow cells show any bone formation or high activities of these biochemical parameters, but the allogeneic cells show osteogenic ability with supplementation of immunosuppressants. Although the number of MSCs in marrow is very small, the number can be expanded using in vitro culture techniques. Importantly, the in vitro-proliferated MSCs can further differentiate into bone-forming osteoblasts and fabricate bone matrix on various ceramics. The in vitro-emerged osteoblasts on ceramics can survive after in vivo syngeneic transplantation and further generate new bone tissue. However, the in vitro-cultured cells cannot show bone formation after in vivo allogeneic transplantation and the cultured allogeneic cells need immunosuppressants to show bone formation. The bone formation ability of the allogeneic cells can be recovered by administration of immunosuppressants. All the data show the survival of allogeneic fresh/cultured MSCs after in vivo transplantation in the presence of immunosuppressants, indicating a clinical significance in skeletal reconstruction surgery.