Background. Scaffolds for bone tissue engineering (BTE) can be loaded with stem and progenitor cells (SPC) from different sources to improve osteogenesis. SPC can be found in bone marrow, adipose tissue, and other tissues. Little is known about osteogenic potential of adipose-derived culture expanded, adherent cells (A-CEAC). This study compares in vivo osteogenic capacity between A-CEAC and bone marrow derived culture expanded, adherent cells (BM-CEAC). Method. A-CEAC and BM-CEAC were isolated from five female sheep and seeded on hydroxyapatite granules prior to subcutaneous implantation in immunodeficient mice. The doses of cells in the implants were 0.5 × 106, 1.0 × 106, or 1.5 × 106 A-CEAC and 0.5 × 106 BM-CEAC, respectively. After eight weeks, bone volume versus total tissue volume (BV/TV) was quantified using histomorphometry. Origin of new bone was assessed using human vimentin (HVIM) antibody staining. Results. BM-CEAC yielded significantly higher BV/TV than any A-CEAC group, and differences between A-CEAC groups were not statistically significant. HVIM antibody stain was successfully used to identify sheep cells in this model. Conclusion. A-CEAC and BM-CEAC were capable of forming bone, and BM-CEAC yielded significantly higher BV/TV than any A-CEAC group. In vitro treatment to enhance osteogenic capacity of A-CEAC is suggested for further research in ovine bone tissue engineering.