A composition comprising bone marrow cells (BMC) and demineralized bone matrix (DBM) and/or mineralized bone matrix (MBM), optionally comprising bone morphogenetic protein (BMP), particularly for use in bone marrow transplantation, into bone marrow cavity or into extraskeletal sites, and methods of transplantation/implantation thereof. The composition and methods of the invention enable restoring and/or enhancing the formation of hematopoiectic microenvironment originating from the transplanted BMC, and are useful in the treatment of hematopoietic disorders, such as deficiency of stem cells and/or their products, genetic conditions resulting in abnormal stem cells and/or products, or hematopoietic disorders of malignant or non-malignant origin. The composition and method of the invention may also be used for the induction of graft tolerence, for the prevention of graft-v-host disease. It is mostly important that the compositions and methods of the invention may be applied for the treatment of diseases affecting primarily or secondarily the stromal microenvironment that supports and regulates hematopoiesis. Further provided is a kit for transplantation into a mammal of BMC in admixture with DBM and/or MBM.