Recent progress in human embryonic and adult stem cell research is a cause for much enthusiasm in bone and joint surgery. Stem cells have therapeutic potential in the realm of orthopaedic surgery because of their capacity to self-renew and differentiate into various types of mature cells and tissues, including bone. Because nonunions remain a clinically important problem, there is interest in the use of cell-based strategies to augment fracture repair. Such strategies are being investigated with variations in the model systems, sources of stem cells, and methods for the application and enhancement of osseous healing, including genetic modifications and tissue-engineering. This review highlights the recent progress in the utilization of stem cells and cell-based gene therapy in promoting fracture-healing and its potential utility in the clinical setting.