The bone marrow preosteoblast was studied using bone formation by subcutaneously placed syngeneic grafts of hemopoietic tissue as the test for the presence of the preosteoblast. The hind limbs of rats were irradiated with 0, 300, 600, or 900 rads, and the femoral and tibial marrow were removed and grafted 4 hr-90 days following irradiation. Grafts of the irradiated marrow, adjusted to match the unirradiated grafts in number of cells or weight of tissue, showed a marked decrease to absence of bone-forming ability over the 90-day period. The hemopoietic cells of this marrow 90 days following irradiation, except for a decrease in cellularity by one quarter, were thought to be normal as judged by differential counts and the presence of hemopoietic stem cells. The interpretations of this separation of the hemopoietic from the bone-forming function of marrow are that the preosteoblast is a nonmigrating cell and that it is not derived from the hemopoietic stem cell.