P-MSCs underwent chondrogenesis, osteogenesis, and adipogenesis in vitro as well as myogenesis in vivo. Multipotency was inherent at the single cell level. P-MSCs were compared with SM-MSCs from the same donors in the capacity to form cartilage in vitro and bone in vivo. Under our experimental conditions, SM-MSCs displayed greater chondrogenic potential than P-MSCs with higher contents of cartilage-specific proteoglycans and higher expression levels of mature chondrocyte markers. For bone formation, engraftment of P-MSCs and SM-MSCs into Collagraft was comparable and either MSC population survived long term in vivo (20 weeks). Histologically, no bone was evident at 4 weeks. At later time points (8–20 weeks), abundant bone formation was detected consistently in all periosteal samples. In contrast, bone was rarely observed, and in small amounts, in the synovial samples, with most human cells contributing to a fibrous-like tissue. In all cases, bone was mostly of human origin. As evaluated by quantitative RT-PCR, the expression levels of human OC, normalized for human beta-actin, were significantly higher in the periosteal samples than in the synovial ones. Bone was neither retrieved in empty Collagraft scaffolds nor in Collagraft scaffolds seeded with human dermal fibroblasts used for a cell negative control.