Stem cells are classified by their tissue source. Embryonic stem cells that are derived from the inner cell mass of blastocyst stage embryos are highly proliferative in their undifferentiated state. A multipotent type of mesenchymal stem cells is isolated from various types of tissues such as bone marrow, fat tissue etc. The dynamics of embryonic and adult stem cell cycles are profoundly dissimilar from the culture of stem cells. After improving the culture conditions and differentiation potentials, differentiated stem cells are the first cells to be preferred in modern regenerative medicine and tissue engineering. This review article focuses on the cell-based therapy of orthopedic problems. We explore the challenges associated with bone repair and regeneration using embryonic or mesenchymal stem cells that are in undifferentiated or/and differentiated condition. This paper also discusses optimizing the best cell type, differentiation condition and using them on bone tissue engineering for future investigations.