Osteogenic cultures of embryonic stem cells (ESCs) are predominately derived from three-dimensional cell spheroids called embryoid bodies (EBs). An alternative method that has been attempted and merits further attention avoids EBs through the immediate separation of ESC colonies into single cells. However, this method has not been well characterized and the effect of omitting the EB step is unknown. Herein, we report that culturing human embryonic stem cells (hESCs) without the EB stage leads to a sevenfold greater number of osteogenic cells and to spontaneous bone nodule formation after 10-12 days. In contrast, when hESCs were differentiated as EBs for 5 days followed by plating of single cells, bone nodules formed after 4 weeks only in the presence of dexamethasone. Furthermore, regardless of the inclusion of EBs, bone matrix formed, including cement line matrix and mineralized collagen, which displayed apatitic mineral (PO4) with calcium-to-phosphorous ratios similar to those of hydroxyapatite and human bone. Together these results demonstrate that culturing hESCs without an EB step can be used to derive large quantities of functional osteogenic cells for bone tissue engineering.