Mesenchymal stromal cells (MSCs) isolated from numerous tissues including human fetal tissue are currently used in cell therapy and regenerative medicine. Among fetal tissues, the umbilical cord (UC) is one of the sources for both MSCs and endothelial cells (ECs). To establish ectopic vascularized bone tissue formation, UC-derived MSCs and ECs were isolated. UC-MSCs expressing human BMP-2 (hBMP-2-MSCs) were generated using an adenoviral system to promote bone formation. These cells were then transplanted with Matrigel into the subcutaneous tissue of an immune deficient NSG mouse, and bone tissue was analyzed after several weeks. The osteogenic differentiation ability of MSCs was elevated by transduction of the hBMP-2 expressing adenoviral system, and vascularization of bone tissue was enhanced by human umbilical vein endothelial cells (HUVEC). In this study, our results provide evidence that MSCs and HUVECs from human umbilical cord are suitable cells to investigate bone tissue engineering. The results also suggest that the co-transplantation of hBMP2-MSCs and HUVEC5 may be a simple and efficient strategy for improving tissue generation and angiogenesis in bone tissue engineering using stem cells. (C) 2018 Elsevier Inc. All rights reserved.