The development of bone tissue engineering has provided new solutions for bone defects. However, the cell-scaffold-based approaches currently in use have several limitations, including low cell seeding rates and poor bone formation capacity. In the present study, we developed a novel strategy to engineer bone grafts using mesenchymal stem cell sheets and coral particles. Rabbit bone marrow mesenchymal stem cells were continuously cultured to form a cell sheet with osteogenic potential and coral particles were integrated into the sheet. The composite sheet was then wrapped around a cylindrical mandrel to fabricate a tubular construct. The resultant tubular construct was cultured in a spinner-flask bioreactor and subsequently implanted into a subcutaneous pocket in a nude mouse for assessment of its histological characteristics, radiological density and mechanical property. A similar construct assembled from a cell sheet alone acted as a control. In vitro observations demonstrated that the composite construct maintained its tubular shape, and exhibited higher radiological density, compressive strength and greater extracellular matrix deposition than did the control construct. In vivo experiments further revealed that new bone formed ectopically on the composite constructs, so that the 8-week explants of the composite sheets displayed radiological density similar to that of native bone. These results indicate that the strategy of using a combination of a cell sheet and coral particles has great potential for bone tissue engineering and repairing bone defects. (C) 2013 Elsevier Inc. All rights reserved.