Adipose tissue is one of the promising sources of multipotent stem cells in human. Human multipotent adipose-derived stem (hMADS) cells have recently been isolated and showed differentiation potential into multiple mesenchymal lineages in vitro and in vivo. On the basis of these evidences, we examined the therapeutic efficacy of hMADS cells for fracture healing in an immunodeficient rat femur non-union fracture model. Local transplantation of hMADS cells radiographically and histologically promoted fracture healing with significant improvement of biomechanical function at the fracture sites compared with local transplantation of human fibroblasts (hFB) or PBS administration. Histological capillary density and physiological blood flow by laser Doppler perfusion imaging were significantly greater in hMADS group than hFB and PBS groups. Expressions of intrinsic (rat) bone morphogenetic protein-2 (BMP-2), vascular endothelial growth factor (VEGF) and angiopoietin-1 in peri-fracture tissue were upregulated in hMADS group than other groups. In addition, presence of BMP-2 or VEGF activated the proliferation and migration of hMADS cells in vitro. These results indicate that hMADS cells stimulate the interaction between the transplanted cells and the resident cells stronger than other cells, and they promote fracture healing more effectively. Furthermore, immunohistochemistry for human-specific antibodies revealed direct differentiation of hMADS cells into osteoblasts or endothelial cells in newly formed callus or vasculature, respectively. RT-PCR for human-specific primers for osteogenic/endothelial markers also disclosed osteogenic and vasculogenic plasticity of the transplanted hMADS cells at the early stage of fracture healing. The present results suggest that transplantation of hMADS cells may become a useful strategy for cell-based bone regeneration in the future clinical setting.