The aim of this study was to elucidate the impact of autologous umbilical cord blood cells (USSC) on bone regeneration and biomechanical stability in an ovine tibial bone defect. Ovine USSC were harvested and characterized. After 12 months, full-size 2.0 cm mid-diaphyseal bone defects were created and stabilized by an external fixateur containing a rigidity measuring device. Defects were filled with (i) autologous USSC on hydroxyapatite (HA) scaffold (test group), (ii) HA scaffold without cells (HA group), or (iii) left empty (control group). Biomechanical measures, standardized X-rays, and systemic response controls were performed regularly. After six months, bone regeneration was evaluated histomorphometrically and labeled USSC were tracked. In all groups, the torsion distance decreased over time, and radiographies showed comparable bone regeneration. The area of newly formed bone was 82.5 ± 5.5% in the control compared to 59.2 ± 13.0% in the test and 48.6 ± 2.9% in the HA group. Labeled cells could be detected in lymph nodes, liver and pancreas without any signs of tumor formation. Although biomechanical stability was reached earliest in the test group with autologous USSC on HA scaffold, the density of newly formed bone was superior in the control group without any bovine HA.