In this study, we examined the effectiveness of systemic subcutaneous delivery of recombinant Insulin-like growth factor (IGF)-I concurrently with primary cultured bone marrow-derived mesenchymal stem cell (MSC) transplant on fracture repair. We found that the fracture callus volume increased in mice with a stabilized tibia fracture that received IGF-I + MSC when compared with that in either untreated or MSC alone treated mice. In evaluating the callus tissue components, we found that the soft and new bone tissue volumes were significantly increased in IGF-I + MSC recipients. Histological and in-situ hybridization analyses confirmed a characteristic increase of newly forming bone in IGF-I + MSC recipients and that healing progressed mostly through endochondral ossification. The increase in soft and new bone tissue volumes correlated with increased force and toughness as determined by biomechanical testing. In conclusion, MSC transplant concurrent with systemic delivery of IGF-I improves fracture repair suggesting that IGF-I + MSC could be a novel therapeutic approach in patients who have inadequate fracture repair.