Biodegradable controlled delivery systems for mesenchymal stem cells (MSCs) have emerged as novel advancements in the field of regenerative medicine, particularly for accelerating bone fracture healing. This detailed study emphasizes the importance of quick and adequate fracture treatment and the limitations of existing methods. New approaches employing biodegradable scaffolds can be placed within a fracture to serve as a mechanical support and allow controlled release of in situ MSCs and bioactive agents. They are made up of polymers and composites which degrade over time, aiding in natural tissue regrowth. The fabrication methods, including 3D printing, electrospinning, and solvent casting, with particulate leaching that enable precise control over scaffold architecture and properties, are discussed. Progress in controlled drug delivery systems including encapsulation techniques and release kinetics is described, highlighting the potential of such strategies to maintain therapeutic benefits over a prolonged time as well as improving outcomes for fracture repair. MSCs play a role in bone regeneration through differentiation using biodegradable scaffolds, paracrine effects, and regulation of inflammation focusing on fracture healing. Current trends and future directions in scaffold technology and MSC delivery, including smart scaffolds with growth factor incorporation and innovative delivery approaches for fracture healing are also discussed.