Exposure of cells to externally applied magnetic fields or to scaffolding materials with intrinsic magnetic properties (magnetic actuation) can regulate several biological responses. Here, we generated novel magnetized nanocomposite hydrogels by incorporation of magnetic nanoparticles (MNPs) into polyethylene glycol (PEG)-based hydrogels containing cells from the stromal vascular fraction (SVF) of human adipose tissue. We then investigated the effects of an external Static Magnetic Field (SMF) on the stimulation of osteoblastic and vasculogenic properties of the constructs, with MNPs or SMF alone used as controls. MNPs migrated freely through and out of the material following the magnetic gradient. Magnetically actuated cells displayed increased metabolic activity. After 1 week, the enzymatic activity of Alkaline Phosphatase (ALP), the expression of osteogenic markers (Runx2, Collagen I, Osterix), and the mineralized matrix deposition were all augmented as compared to controls. With magnetic actuation, strong activation of endothelial, pericytic and perivascular genes paralleled increased levels of VEGF and an enrichment in the CD31+ cells population. The stimulation of signaling pathways involved in the mechanotransduction, like MAPK8 or Erk, at gene and protein levels suggested an effect mediated through the mechanical stimulation. Upon subcutaneous implantation in mice, magnetically actuated constructs exhibited denser, more mineralized and faster vascularized tissues, as revealed by histological and micro-computed tomographic analyses. The present study suggests that magnetic actuation can stimulate both the osteoblastic and vasculogenic potentials of engineered bone tissue grafts, likely at least partially by mechanically stimulating the function of progenitor cells. Copyright © 2019 Elsevier Ltd. All rights reserved.