Trabecular bone fragments can be percutaneously harvested from the ilium using methods that are similar in invasiveness to aspiration of bone marrow. In this study, we investigated the use of the trabecular bone as a cell source for bone tissue engineering. Trabecular bone-derived progenitor cells (TB cells) were isolated with a simple method in which trabecular fragments were first cultured as explants, and then the cells were released by trypsin digestion and advanced to a monolayer culture. The properties of TB cells prepared in this procedure were compared with bone marrow-derived progenitor cells (BM cells). A large number of TB cells could be obtained with less variation among donors, compared with BM cells. In multiple harvests of donor tissue through the same aspiration hole at the cortex, TB cells could be more consistently obtained in primary culture. The proliferative potential of BM and TB cells was similar in serial subculture. TB cells showed a higher alkaline phosphatase expression in the surface marker analysis and greater in vitro osteogenic abilities than BM cells after the initial 14 days of culture. In in vivo bone formation studies, TB cells also showed a higher osteogenic potential than BM cells. The results of this study suggest that TB cells can be considered an attractive source for clinical bone regeneration.