To study the process of the internal callus formation, we cultivated marrow stromal cells derived from bone marrow specimens formed at fracture sites of human long bone in alpha-modified Eagle's medium containing 10% fetal calf serum. After 2 weeks of culture, the cells formed two types of colonies; one consisted of spindle cells, and the other comprised of polygonal cells. The two types of colonies were separated and cultured further. The spindle and polygonal cells proliferated to confluence within 3 weeks and after 4 weeks, respectively, after the separation. Both the spindle and polygonal cells showed on the plasma membrane moderate intensity of staining reaction of alkaline phosphatase (ALPase) activity before the period of confluence and strong intensity during the period of confluence. Then, the spindle cells did not produce calcified matrix, but detached from the dish after 6-8 weeks of culture. In the colonies of polygonal cells, however, dense nodules were formed after 9 weeks of culture, which became visible to the naked eye as white aggregates after 11-12 weeks. Electron microscopic studies on the polygonal cells demonstrated matrix vesicles in the intercellular ground substance after 6 weeks of culture, and electron-dense needle-like crystals on the matrix vesicles after 8-10 weeks of culture. On the basis of infrared spectroscopic analysis, the aggregates were composed of hydroxyapatite. Thus, stromal cells derived from bone marrow specimens formed at fracture site of human long bone differentiated to spindle and polygonal cells containing high ALPase activity (a marker for osteogenic capacity) during culture, and the polygonal cells but not spindle cells produced the calcified matrix.