What is it that defines a bone marrow-derived chondrocyte? We attempted to identify marrow-derived cells with chondrogenic nature and immortality without transformation, defining “immortality” simply as indefinite cell division. KUM5 mesenchymal cells, a marrow stromal cell line, generated hyaline cartilage in vivo and exhibited enchondral ossification at a later stage after implantation. Selection of KUM5 chondroblasts based on the activity of the chondrocyte-specific cis-regulatory element of the collagen α2(XI) gene resulted in enhancement of their chondrogenic nature. Gene chip analysis revealed that OP9 cells, another marrow stromal cell line, derived from macrophage colony-stimulating factor-deficient osteopetrotic mice and also known to be niche-constituting cells for hematopoietic stem cells expressed chondrocyte-specific or -associated genes such as type II collagen α1, Sox9, and cartilage oligomeric matrix protein at an extremely high level, as did KUM5 cells. After cultured OP9 micromasses exposed to TGF-β3 and BMP2 were implanted in mice, they produced abundant metachromatic matrix with the toluidine blue stain and formed type II collagen-positive hyaline cartilage within 2 weeks in vivo. Hierarchical clustering and principal component analysis based on microarray data of the expression of cell surface markers and cell-type-specific genes resulted in grouping of KUM5 and OP9 cells into the same subcategory of “chondroblast,” that is, a distinct cell type group. We here show that these two cell lines exhibit the unique characteristics of hyaline cartilage formation and enchondral ossification in vitro and in vivo. J. Cell. Biochem. 100: 1240–1254, 2007. © 2006 Wiley-Liss, Inc.