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The development of a vasculature within a tissue-engineered construct is one of the largest hurdles to successful bone regeneration. This thesis investigates methods to increase vasculature of such transplanted constructs, based on in vivo transplant studies and in vitro analysis of cell behaviors. A syngeneic mouse model in immunocompetent mice was developed and analyzed for both osteogenesis and hematopoiesis. This study demonstrates that syngeneic bone marrow stromal cells (BMSCs) are not rejected by the host, provided the strain of mice is sufficiently inbred. Additionally, an effective protocol was developed for the isolation of endothelial cells (ECs) from the bone marrow of mice. Two different sets of materials for this study were analyzed, both collagen based, and the GelfoamTM scaffold was found to possess advantages over synthesized collagen or collagen/hydroxyapatite composites, although only for mouse and not human bone transplantation. In order to gain rapid and integrated vasculature formation within the transplant, attempts were made to increase both (de novo) vasculogenesis and angiogenesis (ingrowth) from the surrounding tissue. For the former, transplant studies were combined with in vitro osteogenic calcification studies. Direct co-culture of the BMSCs and ECs increased osteogenic calcification and was monitored by using both alizarin red S quantification and quantitative polymerase chain reaction. Angiogenesis (as assessed by cell migration) was studied by various motility and chemotaxis assays in vitro, as well as through use of a directed in vivo angiogenesis assay. Growth factors, particularly TGF-β1 and BMP-4, were found to increase cell movement in these systems. In conclusion, we show that although much work remains to be done in order to increase the vasculature in bone transplants, systematic combination of in vivo and in vitro assays can elucidate the nature behind this crucial process in this context.