Standardized particulate bone constructs, obtained by expanding autologous mesenchymal stem cells (MSCs) onto coral granules in vitro, were transplanted into long‐bone, critical‐size defects in sheep. Control experiments were also performed in which autologous bone grafts were implanted. Defect cavities were lined with a preformed vascularized membrane (induced by temporarily inserting a cement spacer for 6 weeks prior to bone construct implantation), which served as a mold keeping the engineered bone granules in place. Radiographic, histological, and computed tomographic tests performed 6 months later showed that the osteogenic abilities of the engineered construct and autograft were significantly greater than those of coral scaffold alone. No significant differences were found between the amount of newly formed bone in defects filled with coral/MSCs and those filled with autograft, yet radiological scores differed significantly between the two groups (21% and 100% healed cortices, respectively). The present study on a clinically relevant animal model provides the first evidence that standardized particulate bone constructs can be used to repair large bone defects and that their osteogenic ability approaches that of bone autograft, the bone repair benchmark. By proving feasibility, the present study makes possible the treatment of segmental bone losses with bone constructs engineered from granules, a process which is much simpler than preparing customized massive constructs using computer‐assisted techniques. Important parameters, such as the rate of scaffold resorption and the number of MSCs to be seeded on the scaffolds, need to be optimized before reaching pertinent definitive conclusions. © 2006 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. J Orthop Res 25: 741–749, 2007