Primitive cells of the osteoblast lineage are not well characterized but are known to be present within the STRO‐1⁺ fraction of adult human bone and marrow. A survey of human osteosarcoma cell lines revealed that STRO‐1 is expressed by MG‐63 but not SaOS‐2. Among murine cell lines tested, expression of STRO‐1 was detected in the bipotential (adipocyte/osteoblast) line BMS‐2 but not the committed osteoblast precursor MC3T3‐E1. A proportion of cultured adult human bone marrow stromal cells (BMSCs) consistently expressed the STRO‐1 antigen. The expression of a range of cell surface antigens was studied in relation to STRO‐1 by flow cytometry and several, including the bone/liver/kidney isoform of alkaline phosphatase (ALP), were found to subtype the STRO‐1⁺ population of BMSCs. Further, BMSCs dual‐labeled with antibodies recognizing STRO‐1 and ALP could be assigned to one of four fractions: STRO‐1⁻/ALP⁻, STRO‐1⁺/ALP⁻, STRO‐1⁺/ALP⁺, and STRO‐1⁻/ALP⁺. Cells from each fraction could be isolated in high purity and, when recultured, remained viable and exhibited a limited degree of phenotypic stability. Using reverse transcriptase‐polymerase chain reaction, cells in the four fractions were found to express different levels of transcripts for the parathyroid hormone receptor (PTHr) and bone sialoprotein (BSP). The expression of transcripts for the nuclear transcription factor core‐binding factor alpha 1/osteoblast‐specific factor‐2 (CBFA1/OSF2) was restricted to those fractions expressing STRO‐1 and/or ALP. Treatment with 10 nM dexamethasone consistently increased the proportion of cells present in those fractions which expressed the highest levels of transcripts for PTHr and BSP (STRO‐1⁺/ALP⁺ and STRO‐1⁻/ALP⁺) while simultaneously decreasing the proportion present in the STRO‐1⁺/ALP⁻ fraction. In conclusion, the expression of STRO‐1 in vitro remains a characteristic of less well differentiated cells of the osteoblast lineage; in cultures of BMSCs and in established human osteosarcoma cell lines, there is an inverse association between the expression of STRO‐1 and ALP; dual labeling of BMSCs with monoclonal antibodies recognizing STRO‐1 and ALP permits the identification and isolation of cells of the osteoblast lineage at different stages of differentiation.