Periodontitis is the most common human infectious disease. Regeneration of bone and soft tissue defects after periodontitis remains challenging, although the transplantation of periodontal ligament (PDL) cells seems a liable strategy. However, little is known about the function of PDL cells after transplantation. In the current study, a combination of in vitro coculture systems and in vivo immunohistochemistry (IHC) was used to investigate the role of PDL cells in the regenerative process. First, a coculture method was used, in which mesenchymal cells (representing the host tissue) were brought into direct contact with PDL cells (representing the transplanted cell population). It was found that PDL cells significantly increased mineralized matrix formation and osteocalcin expression, whereas control cells did not. Similar results were obtained when a noncontact coculture system was applied separating PDL and mesenchymal cells. In an in vivo rat model, regeneration of alveolar bone and ligament was seen after PDL cell transplantation. Implanted PDL cells were found clustered along the newly formed tissues. IHC showed enhanced osteopontin expression and gap junction staining in areas neighboring implanted PDL cells. In conclusion, PDL cells enhance periodontal regeneration through a trophic factor stimulating the osteogenic activity of the surrounding host cells.