One of the goals of bone tissue engineering is to design delivery methods for skeletal stem/progenitor cells to repair or replace bone. Although the materials used to retain cells play a central role in the quality of the constructs, the source of cells is key for bone regeneration. Bone marrow is the most common cell source, but other tissues are now being explored, such as the periosteum, fat, muscle, cord blood, and embryonic or induced pluripotent stem cells. The therapeutic effect of exogenous stem/progenitor cells is accepted, yet their contribution to bone repair is not well defined. The in vitro osteo- and/or chondrogenic potential of these skeletal progenitors do not necessarily predict their differentiation potential in vivo and their function may be affected by their ability to home correctly to bone. This review provides an overview of animal models used to test the efficacy of cell-based approaches. We examine the mechanisms of endogenous cell recruitment during bone repair and compare the role of local versus systemic cell recruitment. We discuss how the normal repair process can help define efficacious cell sources for bone tissue engineering and improve their methods of delivery.