Background: Dentigerous cyst (DC) is a bone destructive disease and remains a challenge for clinicians. Marsupialization enables bone to regenerate with capsules maintaining, making it a preferred therapeutic means for DC adjacent to vital anatomical structures. Given that capsules of DC derive from odontogenic epithelium remnants at embryonic stage, we investigated whether there were mesenchymal stem cells (MSCs) located in DC capsules and the role that they played in the bone regeneration after marsupialization.Methods: Samples obtained before and after marsupialization were used for histological detection and cell culture. The stemness of cells isolated from fresh tissues were analyzed by morphology, surface marker and multi-differentiation assays. Comparison of proliferation ability between Am-DCSCs and Bm-DCSCs were evaluated by Cell Counting Kit-8 (CCK-8), fibroblast colony-forming units (CFU-F) and 5’‐ethynyl‐2’‐deoxyuridine (EdU) assay. Their osteogenic capacity in vitro was detected by Alkaline phosphatase (ALP) and Alizarin Red staining (ARS), combined with Real-time polymerase chain reaction (RT-PCR) and immunofluorescence (IF) staining. Subcutaneous ectopic osteogenesis as well as cranial bone defect model in nude mice were performed to detect their bone regeneration and bone defect repair ability.Results: Bone tissue and strong ALP activity were detected in the capsule of DC after marsupialization. Two types of MSCs were isolated from fibrous capsules of DC both before (Bm-DCSCs) and after (Am-DCSCs) marsupialization. These fibroblast-like, colony forming cells expressed MSC markers (CD44+, CD90+, CD31-, CD34-, CD45-), and they could differentiate into osteoblast-, adipocyte- and chondrocyte-like cells under induction. Notably, Am-DCSCs performed better in cell proliferation and self-renewal. Moreover, Am-DCSCs showed greater osteogenic capacity both in vitro and in vivo compared with Bm-DCSCs. Conclusions: There are MSCs residing in capsules of DC, and the cell viability as well as osteogenic capacity of them are largely enhanced after marsupialization. Our findings suggested that MSCs might play a crucial role in the healing process of DC after marsupialization, thus providing new insight into the treatment for DC by promoting the osteogenic differentiation of MSCs inside capsules.