Background: Stem cell therapy offers potential in the regeneration of craniofacial bone defects however, has it not been studied clinically. Tissue repair cells (TRCs) isolated from bone marrow represent a mixed stem and progenitor population enriched in CD90 and CD14 positive cells. In this Phase I/II, randomized, controlled, feasibility trial, we investigated TRC cell therapy to reconstruct localized craniofacial bone defects. Methods: 24 patients requiring localized reconstruction of jawbone defects participated in this longitudinal trial. For regenerative therapy, patients were randomized to receive either guided bone regeneration (GBR) or TRC transplantation. 6 or 12 weeks following treatment, clinical and radiographic assessments of bone repair were performed. Bone biopsies were harvested and underwent quantitative micro-computed tomographic (μCT) and bone histomorphometric analyses. Oral implants were installed, subsequently restored and functionally loaded with tooth restorations. Reconstructed sites were assessed for one year following therapy. Results: No study-related, serious adverse events were reported. Following therapy, clinical, radiographic, tomographic, and histological measures demonstrated that TRC therapy accelerated alveolar bone regeneration compared to GBR therapy. Additionally, TRC treatment significantly reduced the need for secondary bone grafting at the time of oral implant placement with a 5-fold decrease in implant bony dehiscence exposure (residual bone defects) as compared to GBR-treated sites (p < 0.01). Conclusions: Transplantation of TRCs for treatment of alveolar bone defects appears safe and accelerates bone regeneration, enabling jawbone reconstruction with oral implants. The results from this trial support expanded studies of TRC therapy in the treatment of craniofacial deformities (ClinicalTrials.gov number CT00755911).