Autogenous bone grafts are often associated with unpredictable success rates and donor site morbidity. There is clear medical need for cost-effective bone graft material that overcomes these short-comings. Aim: To test a thermally stable, macro-porous collagen scaffold, DuraGen® for bone repair and study its ability to stimulate healing of critical size defects in rat calvaria engrafted with Mesenchymal Stem Cells(MSCs). Methods: Craniotomy defects, 8.9mm diameter were created in 28 adult Sprague-Dawley rats, randomly divided into four groups, 6-Empty(E), 6-Collagen only(C), 8-Collagen+MSCs(C+M), 8-Collagen+rhBMP-2(C+B). Two transgenic rats served as stromal cell donors by means of femoral marrow lavage. Results: Bone repair at 28 days was measured using radiographs and histology. Histology showed mean bone fill of 9.25%(10.82), 19.07%(17.38), 44.21%(3.93) and 66.06%(15.08) respectively. Statistical analysis demonstrated significant differences between: E & C, C & C+M, C+B; none between C+M & C+B. Conclusion: This study clearly displays osteogenic properties of collagen scaffold implanted with MSCs.