Nonunion of fractured bones is a common clinical problem for orthopedic surgeons. This study aimed to investigate the effects of simvastatin locally applied from calcium sulfate (CS) combined with a mesenchymal stem cell (MSC) sheet on fracture healing. In vitro, the proliferation and differentiation of rat bone marrow-derived MSCs stimulated by simvastatin were investigated. In vivo, an osteotomy model was made in rat tibia, and fractured tibias were treated with CS, CS/simvastatin, CS/MSC sheet or simvastatin-loaded CS with MSC or untreated (control). Tibias were harvested at 2 or 8 weeks and underwent real-time quantitative polymerase chain reaction, x-ray, micro-CT and histological analysis. The expression levels of bone morphogenetic protein 2, alkaline phosphatase, osteocalcin, osteoprotegerin and vascular endothelial growth factor of simvastatin-induced MSCs increased with the concentrations of the simvastatin, significantly higher than those in the MSCs group. At 2 weeks, the CS/simvastatin/MSC sheet group showed significantly higher expressions of bone morphogenetic protein 2, alkaline phosphatase, osteocalcin, osteoprotegerin and vascular endothelial growth factor, with more callus formation around the fracture site compared with the other four groups. At 8 weeks, complete bone union was obtained in the CS/simvastatin/MSC sheet group. By contrast, newly regenerated bone tissue partially bridged the gap in the CS/simvastatin group and the CS/MSC sheet group; the control and CS group showed nonunion of the tibia. These results show that both simvastatin and the MSC sheet contributed to the formation of new bone and that the tibia fracture was completely healed by transplantation of the MSC sheet with locally applied simvastatin. Such MSC sheet with locally applied simvastatin might contribute to the treatment of fractures, bone delayed unions or nonunions in clinical practice.