In this study, human dental pulp stem cells (hDPSCs) were examined as a cellular source for bone tissue engineering using an in vivo-forming hydrogel. The hDPSCs are easily harvested in large quantities from extracted teeth that are discarded. The stemness of harvested hDPSCs indicated their relative tolerance to ex vivo manipulation in culture. The in vitro osteogenic differentiation of hDPSCs was characterized using Alizarin Red S (ARS), von Kossa (VK), and alkaline phosphatase (ALP) staining. The solution of hDPSCs and a methoxy polyethylene glycol-polycaprolactone block copolymer (MPEG-PCL (PC)) is easily prepared by simple mixing at room temperature and almost immediately it forms in vivo hydrogels after subcutaneous injection into rats. The hDPSCs embedded in the in vivo-forming PC hydrogel survived for more than at least 6 weeks and induced comparably little inflammation. In vivo osteogenic differentiation of hDPSCs in the in vivo-forming PC hydrogel was confirmed by micro-CT, histological staining, and gene expression. Micro-CT analysis showed evidence of significant tissue-engineered bone formation in hDPSCs-loaded PC hydrogel in the presence of osteogenic factors. Differentiated osteoblasts in in vivo-forming hydrogels were identified by ARS and VK staining and were found to exhibit characteristic expression of genes like osteonectin (ON), osteopontin (OP), and osteocalcin (OC) at different time points. In conclusion, hDPSCs embedded in an in vivo-forming PC hydrogel may provide benefits as a non-invasive formulation for bone tissue engineering applications.