Natural products have attracted great interest in the development of tissue engineering. Recent studies have demonstrated that unsaturated fatty acids found in natural plant seed oil may exhibit positive osteogenic effects; however, few in vivo studies have focused on the use of plant seed oil for bone regeneration. The aim of this study is to investigate the effects of seed oil found in Sapindus mukorossi (S. mukorossi) on the osteogenic differentiation of mesenchymal stem cells and bone growth in artificial bone defects in vivo. In this study, Wharton-jelly-derived mesenchymal stem cells (WJMSCs) were co-cultured with S. mukorossi seed oil. Cellular osteogenic capacity was assessed using Alizarin Red S staining. Real-time PCR was carried out to evaluate ALP and OCN gene expression. The potential of S. mukorossi seed oil to enhance bone growth was assessed using an animal model. Four 6 mm circular defects were prepared at the parietal bone of New Zealand white rabbits. The defects were filled with hydrogel and hydrogel-S. mukorossi seed oil, respectively. Quantitative analysis of micro-computed tomography (Micro-CT) and histological images was conducted to compare differences in osteogenesis between oil-treated and untreated samples. Although our results showed no significant differences in viability between WJMSCs treated with and without S. mukorossi seed oil, under osteogenic conditions, S. mukorossi seed oil facilitated an increase in mineralized nodule secretion and upregulated the expression of ALP and OCN genes in the cells (p < 0.05). In the animal study, both micro-CT and histological evaluations revealed that new bone formation in artificial bone defects treated with S. mukorossi seed oil were nearly doubled compared to control defects (p < 0.05) after 4 weeks of healing. Based on these findings, it is reasonable to suggest that S. mukorossi seed oil holds promise as a potential candidate for enhancing bone healing efficiency in bone tissue engineering.