Segmental bone defects caused by trauma, infection, tumor resection or osteoporotic fractures present significant surgical treatment challenges. Host bone autograft is considered the gold standard to restore function but comes with the cost of harvest site comorbidity. Allograft bone is a secondary option but has its own limitations in incorporation with host bone as well as cost. Therefore, developing new bone tissue engineering strategies to treat bone defects is critically needed. In the past three decades, the use of stem cells delivered with different scaffolds or growth factors for bone tissue engineering has made tremendous progress. Many varieties of stem cells have been isolated from different tissues for use in bone tissue engineering. This review summarizes the progress in using different postnatal stem cells including bone marrow mesenchymal stem cells, muscle-derived stem cells, adipose-derived stem cells, dental pulp stem cells/periodontal ligament stem cells, periosteum stem cells, umbilical cord-derived stem cells, peripheral blood stem cells and urine-derived stem cells for bone tissue engineering and repair. This review also summarizes the progress using exosomes or extracellular vesicles delivered with various scaffolds for bone repair. The advantages and disadvantages of each type of stem cell are also discussed and explained in detail. It is hopeful in the future that these preclinical results will translate into new therapies for bone defect repair.