The monoclonal antibody STRO-1 identifies clonogenic bone marrow stromal cell progenitors (fibroblast colony-forming units [CFU-F]) in adult human bone marrow. These STRO-1+ CFU-F have previously been shown to give rise to cells with the phenotype of fibroblasts, adipocytes, and smooth muscle cells. In this study, the osteogenic potential of CFU- F derived from the STRO-1+ fraction of adult human bone marrow was determined. CFU-F were isolated from normal bone marrow aspirates by fluorescence activated cell sorting, based on their expression of the STRO-1 antigen. Osteogenic differentiation was assessed by the induction of alkaline phosphatase expression, by the formation of a mineralized matrix (hydroxyapatite), and by the production of the bone- specific protein osteocalcin. STRO-1+ cells were cultured in the presence of dexamethasone (DEX; 10(-8) mol/L), ascorbic acid 2- phosphate (ASC-2P; 100 mumol/L), and inorganic phosphate (PO4i; 2.9 mmol/L). After 2 weeks of culture, greater than 90% of the cells in each CFU-F colony stained positive for alkaline phosphatase using a monoclonal antibody specific for bone and liver alkaline phosphatase. Alkaline phosphatase activity was confirmed by histochemistry. A mineralized matrix developed in the CFU-F cultures, after 4 weeks of culture in the presence of DEX, ASC-2P, and PO4i. Mineralization was confirmed by both light and electron microscopy. The mineral was identified as hydroxyapatite by electron dispersive x-ray microanalysis and by x-ray diffraction analysis. In replicate cultures, osteocalcin release was shown after exposure of the cells to 1,25-dihydroxyvitamin D3 (10(-7) mol/L) both by radioimmunoassay and Northern blot analysis. This work provides direct evidence that adult human bone marrow-derived CFU-F are capable of differentiating into functional osteoblasts and that osteoprogenitors are present in the STRO-1+ population.