Human bone marrow contains bone progenitor cells that arise from multipotent mesenchymal stem cells. Seeding bone progenitor cells onto a scaffold can produce a 3D living composite with significant mechanical and biological potential. This article details laboratory and clinical findings from two clinical cases, where different proximal femoral conditions were treated using impacted allograft augmented with marrow-derived autogenous progenitor cells. Autologous bone marrow was seeded onto highly washed morselized allograft and impacted. Samples of the impacted graft were also taken for ex vivo analysis. Both patients made an uncomplicated clinical recovery. Imaging confirmed defect filling with encouraging initial graft incorporation. Histochemical and alkaline phosphatase staining demonstrated that a live composite graft with osteogenic activity had been introduced into the defects. These studies demonstrate that marrow-derived cells can adhere to highly washed morselized allograft, survive the impaction process and proliferate with an osteoblastic phenotype, thus creating a living composite.