Some progress has been made in development of methods to regenerate bone from cultured cells, however no method is put to practical use. Here, we developed methods to isolate, purify, and expand mesenchymal stem cells (MSCs) from mouse compact bone that may be used to regenerate boneinvivo. These cells were maintainedinlong-term culture and were capable of differentiating along multiple lineages, including chondrocyte, osteocyte, and adipocyte trajectories. We used standard cell isolation and culture methods to establish cell cultures from mouse compact bone and bone marrow. Cultures were grown in four distinct media to determine the optimal composition of culture medium for bone-derived MSCs. Putative MSCs were subjected to flow cytometry, alkaline phosphatase assays, immunohistochemical staining, and several differentiation assays to assess cell identity, protein expression, and developmental potential. Finally, we used an in vivo bone formation assay to determine whether putative MSCs were capable of regenerating bone. We found that compact bone of mice was a better source of MCSs than the bone marrow, that growth in plastic flasks served to purify MSCs from hematopoietic cells, and that MSCs grown in basic fibroblast growth factor (bFGF)-conditioned medium were, based on multiple criteria, superior to those grown in leukemia inhibitory factor-conditioned medium. Moreover, we found that the MSCs isolated from compact bone and grown in bFGF-conditioned medium were capable of supporting bone formation in vivo. The methods and results described here haveimplicationsfor understanding MSC biology and for clinical purpose.. © Springer Science+Business Media B.V. 2012.