Cell therapy using human mesenchymal stem cells (MSCs) is an attractive approach for many refractory diseases. Adipose tissue-derived mesenchymal stem cells (AT-MSCs) are considered as a favorable tool due to its abundance in the body, easy proliferation, and high cytokine production potency. In order to avoid the risks associated with the use of fetal bovine serum (FBS) in culture that includes batch variations and contamination with pathogens, development of serum-free culture system has been initiated. We have formulated a completely serum-free culture medium (SFM) that could be used not only for the expansion of AT-MSCs but also for initial isolation. We demonstrate that the AT-MSCs isolated and cultured in serum-free medium (AT-MSCs/SFM) possess high proliferation capacity and differentiation potency to osteoblast, adipocyte, and chondrocyte lineages in vitro. In in vivo bone fraction model analysis, AT-MSCs/SFM showed higher bone repair potency and quality of the regenerated bone than the cells cultured in serum-containing medium (AT-MSCs/SCM). This was attributed to the (i) presence of translated cells in the bone, as evidenced by in vivo imaging of the illuminated translated cells and (ii) high level of expression and induction capacity of AT-MSCs/SFM for cytokine BMP2, CCL2, and CCL5. Taken together, we report a new serum-free culture system for AT-MSCs that is suitable for cell therapy.