A remarkable feature of tissue stem cells is their ability to regenerate the structure and function of host tissue following transplantation. However, the dynamics of donor stem cells during regeneration remains largely unknown. Here we conducted quantitative clonal fate studies of transplanted mouse spermatogonial stem cells in host seminiferous tubules. We found that, after a large population of donor spermatogonia settle in host testes, through stochastic fate choice, only a small fraction persist and regenerate over the long term, and the rest are lost through differentiation and cell death. Further, based on these insights, we showed how repopulation efficiency can be increased to a level where the fertility of infertile hosts is restored by transiently suppressing differentiation using a chemical inhibitor of retinoic acid synthesis. These findings unlock a range of potential applications of spermatogonial transplantation, from fertility restoration in individuals with cancer to conservation of biological diversity.