In vivo assessment of bone formation (osteogenesis) potential by isolated cells is an important method for analysis of cells and factors control ling bone formation. Currently, cell implantation mixed with hydroxyapa-tite/tricalcium phosphate in an open system (subcutaneous implantation) in immunodeficient mice is the standard method for in vivo assessment of bone formation capacity of a particular cell type. The method is easy to perform and provides reproducible results. Assessment of the donor origin of tissue formation is possible, especially in the case of human-to-mouse transplanta tion, by employing human specific antibodies or in situ hybridization using human specific Alu-repeat probes. Recently, several methods have been developed to quantitate the newly formed bone using histomorphometric methods or using non-invasive imaging methods. This chapter describes the use of in vivo transplantation methods in testing bone formationpotential of human mesenchymal stem cells.