Objectives. In order to ensure safety of the cell-based therapy for bone regeneration, we examined in vivo biodistribution of locally or systemically transplanted osteoblast-like cells generated from bone marrow (BM) derived mononuclear cells. Methods. BM cells obtained from a total of 13 Sprague-Dawley (SD) green fluorescent protein transgenic (GFP-Tg) rats were culture-expanded in an osteogenic differentiation medium for three weeks. Osteoblast-like cells were then locally transplanted with collagen scaffolds to the rat model of segmental bone defect. Donor cells were also intravenously infused to the normal Sprague-Dawley (SD) rats for systemic biodistribution. The flow cytometric and histological analyses were performed for cellular tracking after transplantation. Results. Locally transplanted donor cells remained within the vicinity of the transplantation site without migrating to other organs. Systemically administered large amounts of osteoblast-like cells were cleared from various organ tissues within three days of transplantation and did not show any adverse effects in the transplanted rats. Conclusions. We demonstrated a precise assessment of donor cell biodistribution that further augments prospective utility of regenerative cell therapy. Cite this article: Bone Joint Res 2014;3:76–81