Abnormal fibroblasts have been implicated in keloid formation, a benign but fibroproliferative skin disorder. However, the exact source of these cells remains unknown. Fibrocytes are considered to be hybrid mesenchymal/hematopoietic cells, having been identified in various fibrotic disorders as the precursors of fibroblasts. Therefore, we hypothesized that a population of fibrocytes is present in keloid tissue as opposed to the mesenchymal stem cells (MSCs). We compared the proportion of MSCs in keloid versus bone marrow-derived cells and compared fibrocytes in keloid as opposed to normal scar tissue. We also investigated the propagation of fibrocytes in serum-supplemented versus serum-free media. Using multicolor fluorescence-activated cell analysis, we found distinct populations of MSCs (CD34(-)CD73(+)CD90(+)CD105(+)) that were different from CD45RO(+)25F9(+)MRP8/14(+) fibrocytes present in keloid tissue, while very few fibrocytes were observed in normal scar tissue. The proportion of keloid-derived cells in serum-free or serum-supplemented cultures expressing these fibrocyte markers was greater than from cultures derived from normal scar tissue (p < 0.05). We found that the proliferation of CD45(+)/Col1(+) keloid cells in vitro was greater in serum-free media compared to serum-supplemented media. This is the first study to have identified fibrocytes isolated from keloid tissue and normal scars, utilizing a specific set of markers for fibrocytes. This finding may aid our understanding of the origin of abnormal fibroblasts identified in keloid scarring. The identification of fibrocyte populations distinct from MSCs in keloid scar tissue could lead to novel targets for therapeutic intervention, treatment and prevention of recurrence.