Nondegradable synthetic polymer vascular grafts used in cardiovascular surgery have shown serious shortcomings, including thrombosis, calcification, infection, and lack of growth potential. Tissue engineering of vascular grafts with autologous stem cells and biodegradable polymeric materials could solve these problems. The present study is aimed to develop a tissue-engineered vascular graft (TEVG) with functional endothelium using autologous bone marrow-derived cells (BMCs) and a hybrid biodegradable polymer scaffold. Hybrid biodegradable polymer scaffolds were fabricated from poly(lactide-co-epsilon-caprolactone) (PLCL) copolymer reinforced with poly(glycolic acid) (PGA) fibers. Canine bone marrow mononuclear cells were induced in vitro to differentiate into vascular smooth muscle cells and endothelial cells. TEVGs (internal diameter: 10 mm, length: 40 mm) were fabricated by seeding vascular cells differentiated from BMCs onto PGA/PLCL scaffolds and implanted into the abdominal aorta of bone marrow donor dogs (n = 7). Eight weeks after implantation of the TEVGs, the vascular grafts remained patent. Histological and immunohistochemical analyses of the vascular grafts retrieved at 8 weeks revealed the regeneration of endothelium and smooth muscle and the presence of collagen. Western blot analysis showed that endothelial nitric oxide synthase (eNOS) was expressed in TEVGs comparable to native abdominal aortas. This study demonstrates that vascular grafts with significant eNOS activity can be tissue-engineered with autologous BMCs and hybrid biodegradable polymer scaffolds.