The transplantation of pre-vascularized bone grafts is a promising strategy to improve the efficacy of engraftment and bone regeneration. We propose a hydrogel microbead-based approach for preparing vascularized and high-density tissue grafts. Mesenchymal stem cell-encapsulated collagen microgels (2µL), termed bone beads, were prepared through spontaneous constriction, which improved the density of the mesenchymal stem cells and collagen molecules by more than 15-fold from the initial day of culture. Constriction was attributed to cell-attractive forces and involved better osteogenic differentiation of mesenchymal stem cells than that of spheroids. This approach was scalable, and ∼2000 bone beads were prepared semi-automatically using a liquid dispenser and spinner flask. The mechanical stimuli in the spinner flask further improved the osteogenic differentiation of the mesenchymal stem cells in the bone beads compared with that in static culture. Vascular endothelial cells readily attach to and cover the surface of bone beads. The in vitro assembly of the endothelial cell-enveloped bone beads resulted in microchannel formation in the interspaces between the bone beads. Significant effects of endothelialization on in vivo bone regeneration were shown in rats with cranial bone defects. The use of endothelialized bone beads may be a scalable and robust approach for treating large bone defects. STATEMENT OF SIGNIFICANCE: A unique aspect of this study is that the hMSC-encapsulated collagen microgels were prepared through spontaneous constriction, leading to the enrichment of collagen and cell density. This constriction resulted in favorable microenvironments for the osteogenic differentiation of hMSCs, which is superior to conventional spheroid culture. The microgel beads were then enveloped with vascular endothelial cells and assembled to fabricate a tissue graft with vasculature in the interspaces among the beads. The significant effects of endothelialization on in vivo bone regeneration were clearly demonstrated in rats with cranial bone defects. We believe that microgel beads covered with vascular endothelial cells provide a promising approach for engineering better tissue grafts for bone-regenerative medicine.