Bone regeneration involves multiple factors such as tissue interactions, an inflammatory response, and vessel formation. In the event of diseases, old age, lifestyle, or trauma, bone regeneration can be impaired which could result in a prolonged healing duration or requiring an external intervention for repair. Currently, bone grafts hold the golden standard for bone regeneration. However, several limitations hinder its clinical applications, e.g., donor site morbidity, an insufficient tissue volume, and uncertain post-operative outcomes. Bone tissue engineering, involving stem cells seeded onto scaffolds, has thus been a promising treatment alternative for bone regeneration. Adipose-derived mesenchymal stem cells (AD-MSCs) are known to hold therapeutic value for the treatment of various clinical conditions and have displayed feasibility and significant effectiveness due to their ease of isolation, non-invasive, abundance in quantity, and osteogenic capacity. Notably, in vitro studies showed AD-MSCs holding a high proliferation capacity, multi-differentiation potential through the release of a variety of factors, and extracellular vesicles, allowing them to repair damaged tissues. In vivo and clinical studies showed AD-MSCs favoring better vascularization and the integration of the scaffolds, while the presence of scaffolds has enhanced the osteogenesis potential of AD-MSCs, thus yielding optimal bone formation outcomes. Effective bone regeneration requires the interplay of both AD-MSCs and scaffolds (material, pore size) to improve the osteogenic and vasculogenic capacity. This review presents the advances and applications of AD-MSCs for bone regeneration and bone tissue engineering, focusing on the in vitro, in vivo, and clinical studies involving AD-MSCs for bone tissue engineering.