We report on a subset of cells that co-purify with CD45-positive/Lineage minus (CD45(pos)/Lin(minus)) hematopoietic cells that are capable of in vitro differentiation into multi-potential cells including cells with neuroectoderm properties. Although these cells are CD45 positive and have properties similar to CD45-negative mesenchymal progenitor cells (MPC) derived from bone marrow (BM), they are neither hematopoietic cells nor mesenchymal cells. These CD45(pos)/Lin(minus) cells can be expanded in vitro, express the stem cell genes Oct-4 and Nanog and can be induced to differentiate into endothelial cells, osteoblasts, muscle cells and neural cells at frequencies similar to those reported for bone marrow mesenchymal cells. Long-term culture of these cells followed by transplantation into NOD/SCID mice resulted in positive bone marrow stromal cell engraftment but not hematopoietic engraftment, suggesting that despite their CD45-positive status these cells do not have the same properties as hematopoietic stem cells. Clonal cell analysis determined that the culture period caused a broadening in the differentiation potential of the starting population.