Objective: To compare the clinical outcome of alveolar cleft bone grafting with expanded mesenchymal stem cells (MSCs) seeded into a resorbable matrix to standard iliac cancellous bone graft. Subjects and methods: Fifteen patients with unilateral alveolar cleft aged 7-12 years old (eight girls and seven boys) were randomly divided, according to grafting technique, into two groups: Group I: Alveolar cleft grafting with expanded autogenous bone marrow stem cells seeded in collagen sponge, platelet rich plasma and nanohydroxyapatite. Group II: Alveolar cleft grafting with cancellous bone harvested from anterior iliac crest. Follow up clinical evaluation on the first postoperative day, every other day for the first week, weekly thereafter for a month then every month for six months concerning postoperative pain, soft tissue healing, oronasal fistula closure and tooth eruption. Results: All patients in group I experienced no pain or discomfort at the bone marrow aspiration site while patients in group II experienced pain scored 3 by VAS and disappeared gradually within a week. wound dehiscence represented 14% of group II. After six months postoperatively eruption of lateral incisor was observed in 25% in group I versus 14% in group II. Conclusion: The effect of stem cell tissue engineering did prove to have a positive clinical result compared to gold standard used in alveolar cleft grafting and provided significant support to the healing of soft tissues around the alveolar cleft. Tissue engineering bone graft is a cost effective and require two setting comparable to the autogenous bone graft.