The clinical demand for functional tissue-engineered bone grafts to regenerate bone defects resulting from trauma and surgical resection of congenital anomalies remains very high. One approach involves the use of human mesenchymal stem cells (hMSCs) that are seeded into biomaterial scaffolds and are induced to generate new bone tissue by osteo-inductive cues. The size of tissue constructs that can be cultured under conventional static conditions is seriously limited by diffusional constraints of nutrient supply resulting from high metabolic activity of bone cells. To cultivate bone constructs of clinically-relevant sizes, it is necessary to utilize perfusion bioreactors, which provides convective transfer of nutrients, and most critically oxygen, to the cells throughout the construct volume. This chapter describes a method for engineering 4-mm thick cylindrical bone grafts using hMSCs (isolated from bone marrow aspirates), biomaterial scaffolds (made of fully decellularized bovine trabecular bone), and a perfusion bioreactor (designed for simultaneous cultivation of six constructs for up to 5 weeks). This approach results in the formation of completely viable, biological bone grafts of clinically relevant sizes.