Purpose: This study investigated the role of the bone marrow-derived CD34+ cell in a milieu of osteoprogenitor cells, bone marrow plasma cell adhesion molecules, recombinant human bone morphogenetic protein (rhBMP), and a matrix of crushed cancellous allogeneic bone in the clinical regeneration of functionally useful bone in craniomandibular reconstructions. The history and current concepts of bone marrow hematopoietic stem cells and mesenchymal stem cells are reviewed as they relate to bone regeneration in large continuity defects of the mandible. Materials and Methods: Patients with 6- to 8-cm continuity defects of the mandible with retained proximal and distal segments were randomized into two groups. Group A received an in situ tissue-engineered graft containing 54 ± 38 CD34+ cells/mL along with 54 ± 38 CD44+, CD90+, and CD105+ cells/mL together with rhBMP-2 in an absorbable collagen sponge (1 mg/cm of defect) and crushed cancellous allogeneic bone. Group B received the same graft, except the CD34+ cell concentration was 1,012 ± 752 cells/mL. The results were analyzed clinically, radiographic bone density was measured in Hounsfield units (HU), and specimens were analyzed histomorphometrically. Results: Forty patients participated (22 men and 12 women; mean age, 57 years). Eight of 20 group A patients (40%) achieved the primary endpoint of mature bone regeneration, whereas all 20 group B patients (100%) achieved the primary endpoint. CD34+ cell counts above 200/mL were associated with achievement of the primary endpoint. Bone density was lower in group A (424 ± 115 HU) than in group B (731 ± 98 HU). Group A bone showed a mean trabecular bone area of 36% ± 10%, versus 67% ± 13% for group B. Conclusions: The CD34+ cell functions as a central signaling cell to mesenchymal stem cells and osteoprogenitor cells in bone regeneration. The mechanism of bone marrow-supported grafts requires a complete milieu to regenerate large quantities of functionally useful bone. CD34+ cell counts in a concentration of at least 200/mL in composite grafts are directly correlated to clinically successful bone regeneration. Keywords: bone regeneration, hematopoietic stem cells, mesenchymal stem cells, recombinant human bone morphogenetic protein