Periodontal ligament (PDL) is a unique connective tissue that not only connects cementum and alveolar bone to support teeth, but also plays an important role in reconstructing periodontal tissues. Previous studies have suggested that PDL cells have osteogenic potential; however, they lack precise histological examinations. Here, we studied bone-like matrix formation by PDL cells in rats using morphological techniques. Rat and human PDL cells exhibited substantial alkaline phosphatase activity and induced mineralization in vitro. RT-PCR analyses showed that PDL cells expressed the osteoblast markers, Runx2, osterix, and osteocalcin. These results suggest that PDL cells share similar phenotypes with osteoblasts. To examine the bone-like matrix formation in vivo, PDL cells isolated from green fluorescent protein (GFP)-transgenic rats were inoculated with hydroxyapatite (HA) disks into wild-type rats. Five weeks after the implantation, the pores in HA disks were occupied by GFP-positive cells. Mineralized matrix formation was also found on the surface of HA pores. At 12 weeks, some of the pores were filled with bone-like mineralized matrices (BLMM), which were positive for the bone matrix proteins, osteopontin, bone sialoprotein, and osteocalcin. Immunohistochemical examination revealed that most of the osteoblast- and osteocyte-like cells on or in the BLMM were GFP-positive, suggesting that the BLMM were directly formed by the inoculated PDL cells. On the pore surfaces, Sharpey's fiber-like structures embedded in cementum-like mineralized layers were also observed. These results collectively suggest that PDL cells have the ability to form periodontal tissues and could be a useful source for regenerative therapies of periodontal diseases.