Clinical translation of cell-based strategies for regenerative medicine demands predictable in vivo performance where the use of sera during in vitro preparation inherently limits the efficacy and reproducibility. Here, we present a bioinspired approach by serum-free pre-conditioning of human periosteum-derived cells, followed by their assembly into microaggregates simultaneously primed with bone morphogenetic protein 2 (BMP-2). Pre-conditioning resulted in a more potent progenitor cell population, while aggregation induced osteochondrogenic differentiation, further enhanced by BMP-2 stimulation. Ectopic implantation displayed a cascade of events that closely resembled the natural endochondral process resulting in bone ossicle formation. Assessment in a critical size long-bone defect in immunodeficient mice demonstrated successful bridging of the defect within 4 weeks, with active contribution of the implanted cells. In short, the presented serum-free process represents a biomimetic strategy, resulting in a cartilage tissue intermediate that, upon implantation, robustly leads to the healing of a large long-bone defect.