Disclosed are perivascular medicinal cells (PVMCs), methods of isolating PVMCs, and a composition comprising PVMCs having medicinal capabilities. Specifically, the disclosure provides a method of isolating PVMCs from an umbilical cord blood vessel or from bone. The disclosure further provides a method of making an enhanced, autologous bone graft, a method of stimulating bone regeneration comprising administering a therapeutically effective amount of bone-derived PVMCs, a method of reconstructing bone tissue, and methods of treating a disease that affects cellular function. PVMCs capable of secreting a site-dependent trophic factor are also described.
