Numerous important developments in tissue engineering of new bone during the last 10 years are reviewed. Early efforts to combine cells with biocompatible materials are described and applications of this technology are presented with particular focus on uses in orthopaedics and maxillofacial surgery. Basic principles of tissue engineering focusing on cell biology and materials science as used currently in the field are presented. Finally, future challenges are outlined from the perspective of integrating technologies from medicine, biology, and engineering in hopes of translating tissue engineering to clinical applications.