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Populations of marrow stromal fibroblasts (MSFs) can differentiate into functional osteoblasts and form bone in vivo. It is not known, however, what proportion of MSF precursor cells, colony forming units-fibroblast (CFU-Fs), have osteogenic potential. In the present study, analysis of bone formation in vivo by single-colony derived strains of human marrow stromal fibroblasts (HMSFs) has been performed for the first time. Each strain originated from an individual CFU-F and underwent four passages in vitro prior to subcutaneous implantation into immunodeficient mice within vehicles containing hydroxyapatite-tricalcium phosphate ceramic. Multicolony derived HMSF strains were also transplanted to serve as positive controls. After 8 weeks, abundant bone formation was found in the transplants of all multicolony derived HMSF strains, whereas 20 out of 34 (58.8%) single-colony derived strains from four donors formed bone. Immunostaining with antibody directed against human osteonectin and in situ hybridization for human-specific alu sequences demonstrated that cells forming new bone were of human origin and were vital for at least 45 weeks post-transplantation. Both the incidence of bone-forming colonies and the extent of bone formation by single-colony derived HMSF strains were increased by cultivation with dexamethasone and ascorbic acid phosphate. Other factors, including type of transplantation vehicle, morphology, size, and structure of the original HMSF colonies showed no obvious correlation with the incidence or extent of bone formation. Hematopoietic tissue within the newly formed bone was developed in the transplants exhibiting exuberant bone formation. These results provide evidence that individual human CFU-Fs have osteogenic potential and yet differ from each other with respect to their osteogenic capacity.