AbstractTo induce new bone formation, mesenchymal stem cells were seeded onto atelocollagen honeycomb scaffold. We evaluated the efficacy of this scaffold combined with KUSA/A1 cells in vivo. KUSA/A1 cells alone and with atelocollagen were implanted in the subcutaneous pockets of 4‐week‐old male SCID mice. The transplants were subjected to radiographical, histological, and immunohistochemical examinations after 2 and 4 weeks of implantation. Radiographically, both KUSA/A1 cells alone and KUSA/A1‐atelocollagen showed some radiopaque areas formation but the latter disclosed a larger amount. Histologically, KUSA/A1 cells alone showed few small islands of new bone formation surrounded by a thin layer of cellular proliferation. On the other hand, KUSA/A1‐atelocollagen revealed abundant new bone formation as well as cellular proliferation. We also determined the immunolocalization of type I collagen, CD34, osteocalcin, osteopontin, and PCNA in this newly formed bone. Our results indicated that collagen scaffold plays an important role allowing vessel formation and cell anchorage, especially through the proliferation and differentiation process in a confined space. This study supports tissue engineering as an alternative for treating different target diseases, such as trauma or congenital defects, and enhances existing therapeutic applications. © 2006 Wiley Periodicals, Inc. J Biomed Mater Res, 2006