Cell-based tissue engineering is limited by the size of cell-containing constructs that can be successfully cultured in vitro. This limit is largely a result of the slow diffusion of molecules such as oxygen into the interior of three-dimensional scaffolds in static culture. Bioreactor culture has been shown to overcome these limits. In this study we utilize a tubular perfusion system (TPS) bioreactor for the three-dimensional dynamic culture of human mesenchymal stem cells (hMSCs) in spherical alginate bead scaffolds. The goal of this study is to examine the effect of shear stress in the system and then quantify the proliferation and differentiation of hMSCs in different radial annuli of the scaffold. Shear stress was shown to have a temporal effect on hMSC osteoblastic differentiation with a strong correlation of shear stress, osteopontin, and bone morphogenic protein-2 occurring on day 21, and weaker correlation occurring at early timepoints. Further results revealed an approximate 2.5-fold increase in cell number in the inner annulus of TPS cultured constructs as compared to statically cultured constructs after 21 days. This result demonstrated a nutrient transfer limitation in static culture which can be mitigated by dynamic culture. A significant increase (P?