Mesenchymal stem cells (MSCs) and endothelial progenitor cells (EPCs) have been demonstrated as an attractive cell source for tissue engineering applications because of their ability to be isolated and expanded. Even though MSCs and EPCs constitute a powerful candidate cell type for regenerative medicine, more knowledge in terms of their biological properties is required before using these cells as a routinely applied therapy in the clinical setting. The nature of their mobilizing, migratory and homing signals and the mechanisms of differentiation and incorporation into the target tissues need to be clarified and further characterized. This paper examines the biological properties of these cells, the animal trials that have been performed so far and highlights their therapeutic potential in the treatment of musculoskeletal and cardiovascular diseases.