We have hypothesized that human bone marrow-derived mesenchymal stem cells (BMMSCs), that are not osteogenically differentiated prior to implantation, would regenerate bone extensively in vivo once exogenous bone morphogenetic protein-2 (BMP-2) was delivered to the implantation site. BMP-2 released from heparin-conjugated poly(lactic-co-glycolic acid) (HCPLGA) scaffolds stimulates osteogenic differentiation of cultured BMMSCs. Upon implantation, undifferentiated BMMSCs on BMP-2-loaded HCPLGA scaffolds induce far more extensive bone formation than either undifferentiated BMMSCs or osteogenically differentiated BMMSCs on HCPLGA scaffolds. These BMP-2-loaded HCPLGA scaffolds could prove invaluable for in vivo regeneration of bone from undifferentiated human BMMSCs.