Fracture nonunion increases patient morbidity and healthcare costs. Bone grafts are often used in these defects but have several drawbacks. Bone-marrow–derived mesenchymal stem cells (BMSCs) may be an appealing alternative due to their trophic properties and immune-suppression function. 17β-estradiol has been shown to improve the osteogenesis and proliferation potential of mesenchymal stem cells in humans. This study evaluated the effect of 17β-estradiol on exploiting autologous BMSCs for healing of radial nonunion segmental defects in 20 rabbits. Through serial radiologic assessment and histopathologic evaluation, 17β-estradiol was found to provide BMSCs with improved osteogenic capacity and an accelerated rate of bone healing.