Bone maintenance requires a continuous source of osteoblasts throughout life. Its remodeling and regeneration during fracture repair is ensured by osteoprogenitor stem cells which are part of the stroma of the bone marrow (BM). Many investigators have reported that in cultured BM stromal cells there is a cell population that will differentiate along an osteogenic lineage if stimulated by the addition of osteogenic inducers, such as dexamethasone (dex), beta-glycerophosphate (beta-GP), transforming growth factor beta-1 (TGF-beta 1) and bone morphogenetic protein-2 (BMP-2). Here we report the effects of demineralized bone matrix (DBM) on the osteogenic differentiation of BM stromal cells in vitro, using morphological criteria, alkaline phosphatase (AP) activity, and calcium accumulation. DBM and DBM-conditioned medium (DBMcm) enhanced bone formation in the presence of dex and beta-GP, whereas DBM particles caused changes in the cell phenotype. Temporal expression of total and skeletal AP by BM stromal cells from 4-week-old rats showed a biphasic pattern enhanced by DBM and suggesting the presence of two cell populations. In one population, AP synthesis reaches a maximum during the first week in culture, following which cells either die or loose their ability to synthesize AP. A second, less abundant population begins to proliferate and synthesize AP during the second and third weeks. The synthesis of AP, which often decreases by the third week, can be maintained at high levels only if DBM is added to the cultures. BM stromal cells isolated from 24- and 48-week-old rats showed a decrease or loss of this biphasic AP expression pattern compared with cells isolated from 4-week-old rats. The addition of DBM to cultures derived from 24- and 48-week-old rats stimulated mostly the second cell population to synthesize AP, suggesting that DBM contains a factor(s) that acts on a specific bone marrow cell population by increasing the proliferation of active cells or inducing the differentiation of dormant cells.