This study was performed to evaluate the effectiveness of mesenchymal stem cells (MSCs) on bone healing and to assess the role of various chemical stimulants and mediators in healing. Forty female mice were randomly assigned to 4 groups (10 mice each) after the induction of fixed fractures: group I: received fixation only; group II: received phosphate-buffered saline (PBS); group III: received intralesion MSCs (IL-MSCs); and group IV: received intraperitoneal MSCs (IP-MSCs). Serum alkaline phosphatase (ALP) levels and the expression of the osteocalcin (OCN), bone morphogenetic protein-2 (BMP-2), and stromal-derived factor-1 (SDF-1) genes were measured. ALP reached baseline level only in IL-MSCs, whereas OCN reached baseline level in MSCs recipients (IL-MSCs and IP-MSCs). BMP-2 significantly increased in MSCs recipients 3 weeks postfracture and increased in all groups 8 weeks postfracture with significant increases in MSC recipients than the fixation and PBS groups. The highest BMP-2 expression was reached in IL-MSC group. MSCs either locally or systemically improves or accelerates the healing of bone fractures with better results obtained after local injection, as shown by biochemical, radiological, and histological findings. MSCs are effective candidates for bone regeneration.