In some tissues, stem cells are enriched within the side population (SP) cells characterized by the efficient efflux of Hoechst 33342, but few data are yet available to address whether such is the case in bone tissue. When we Hoechst-stained and FACS-analyzed freshly isolated 20- or 21-day fetal rat calvaria (RC) cells, a small fraction of cells (0.15 +/- 0.05%) comprised of a distinct SP. When SP, non-SP and total/unfractionated (Total) RC cells were plated at a density of 30 cells per microtiter well, the percentage of wells containing bone-forming progenitors (CFU-O) was significantly higher in the SP compared to the non-SP or Total populations (13 +/- 4% vs. 1.8 +/- 0.4% and 0.7 +/- 0.4% respectively). The SP was also highly enriched for CFU-alkaline phosphatase (CFU-ALP) and CFU-fibroblast (CFU-F). While Dex increased the recruitment of CFU-O and CFU-F in the SP, it did not increase the frequency of CFU-ALP. Limiting dilution analysis showed a non-linear relationship between cell densities (1, 5, 10, 20 and 30 cells/microtiter well) and the frequency of readout CFU-O, CFU-ALP and CFU-F in all populations, suggesting a cell non-autonomous component to proliferation-differentiation of these progenitor types. When the developmental potential of SP cells for chondrocyte, adipocyte and neural lineages was assessed, SP cells were also found to be enriched for progenitors of all three lineages. These data demonstrate that Hoechst staining and SP sorting by flow cytometry are a useful strategy for the enrichment of CFU-O and possibly other precursors present in RC cell populations.