Cleft palate is the second most common congenital malformation in the US. It is formed due to failure of closure of two palates of the skull that forms the hard palate. Reconstruction of bony part in hard palate is important to preserve normal facial growth. Cleft palate repair requires extensive surgical procedures using bone graft techniques, which is associated with an extended healing time. The objective of this research is to develop a novel injectable stem cell-based scaffold system for the repair and regeneration of bone with special reference to cleft palate. Injectable scaffolds, as carriers of bioactive materials, can fill the 3 D shapes of the bony cavities in situ without any voids and thus will facilitate uniform bone formation, minimize infections and repeated surgeries. The proposed composite scaffold system is a combination of mesenchymal stem cells derived from bone marrow (BMSCs) and alginate/nanocrytalline hydroxyapatite (nHAP)/demineralized bone matrix (DBM). DBM is a natural bone graft material which contains growth factors such as bone morphogenic proteins. DBM scaffold is moldable/ injectable at the site of defect, sets in situ, and supports osteogenesis. Alginate is a natural biomaterial widely used as microcarriers of bioactive cells and molecules. Mesenchymal stem cells embedded in alginate in combination with nHAP provides necessary environment for cell proliferation and enhanced osteogenesis. This project has two specific aims: 1) to characterize the alginate/nHAP/DBM scaffold in terms of its properties such as paste consistency, injectability, setting time and mechanical strength 2) to investigate the viability and osteogenic differentiation of BMSCs encapsulated in alginate/nHAP loaded on to DBM scaffold. The outcome of the project will provide a cell-based therapeutic system for bone tissue engineering.