Primary cultures were initiated from marrow, spleen, and bone explants of an adult H-2Kb-tsA58 transgenic mouse (immortomouse). All cultures were initiated in immortalizing conditions, and an additional marrow culture was first incubated for 1 week in standard conditions and then switched to immortalizing conditions. Marrow cells immediately immortalized were designated the marrow immediate population (MIP); those immortalized after 1 week were termed the marrow delayed population (MDP). MIP and MDP cells both contained a mixture of fibroblastic or flattened cells, and the MIP cells contained an additional subpopulation of adipocytic (Oil Red-O positive) cells. Alkaline phosphatase expression was induced by dexamethasone (10(-7) M) in MDP cells while MIP, spleen, and bone explant cells had only a low level of expression. MDP and MIP cells differentiated into bone when combined with porous calcium phosphate ceramics and implanted subcutaneously into nude mice while bone- and spleen-derived cells did not. Clones were isolated from the MDP and MIP cell populations and tested for differentiated phenotypes. Some MIP-derived clones exhibited adipocytic characteristics while MDP-derived subclones were negative. Histologic examination of porous ceramic implanted clones showed that all of the clones had osteogenic potential. Clones exposed to either dexamethasone, human recombinant bone morphogenetic protein-2, or horse serum plus hydrocortisone showed differences in expression of adipocytic or osteogenic markers. These immortalized cultures have retained both adipocytic and osteogenic potential even after 1 year of continuous culture, and provide a model system for clonal analysis of the developmental potential of marrow-derived mesenchymal precursor cells.