Objectives The aim of this study was to investigate if bone regeneration can be promoted by homologous transplantation of STRO-1 sorted (STRO-1+) porcine tooth germ mesenchymal stem cells (TGSCs) with the combination of polyethylenglycol (PEG)-based hydrogel and biphasic calcium phosphate (BCP) scaffolds. Material and methods TGSCs were isolated from impacted third molars of domestic pigs. Nine critical-sized defects were created as (1) untreated defect; filled with (2) autogenous bone; (3) BCP + PEG; (4) BCP + PEG + unsorted TGSCs; (5) BCP + unsorted TGSCs; (6) BCP + PEG + STRO-1-sorted TGSCs; (7) BCP + STRO-1-sorted TGSCs; (8) BCP + PEG + osteogenic induced unsorted TGSCs; and (9) BCP + PEG + osteogenic induced STRO-1-sorted TGSCs in 20 domestic pigs. CM-DiI labelling was used to track cells in vivo. Histomorphometric assessment of new bone formation was achieved by toluidine blue O staining and microradiography after 1, 2, 4 and 12 weeks posttransplantation. Results Complete healing was achieved in all defects although defects with PEG hydrogel presented better bone formation while STRO-1+ and unsorted TGSCs showed similar ability to form new bone after 12 weeks. Transplanted cells were seen in defects where PEG hydrogel was used as carriers in contrast to defects treated with cells and only bone grafts. Conclusions PEG hydrogel is an efficient carrier for homologous stem cell transplantation. TGSCs are capable of promoting bone healing in critical-sized defects in combination with bone graft and PEG hydrogel.