Atrophic and delayed non–union is attributed to biological failure of the fracture repair process. Present in 10% of treated fracture and results in significant morbidity to patients, and frequently requires complex reconstructive procedures. We studied a novel technique in harvesting of adipose derived mesenchymal stem cells (ADMSCs) and delivered percutaneously to the fracture gap. At nine weeks, 70% of nonunions and 80% delayed unions in the stem cell treatment groups showed evidence of bone healing. Radiographic and clinical evidence showed significant improvement over the nine–week period confirmed bone bridges at the fracture gap in the treatment group. The rate of union and the amount of callus was significantly more in the treated group. The results from this study demonstrate that ADMSC have significant bone regeneration potential in non–union and delayed union of fractures.