Since discovery, significant interest has been generated in the potential application of mesenchymal stem cells or multipotential stromal cells (MSC) for tissue regeneration and repair, due to their proliferative and multipotential capabilities. Although the sheep is often used as a large animal model for translating potential therapies for musculoskeletal injury and repair, the characteristics of MSC from ovine bone marrow have been inadequately described. Histological and gene expression studies have previously shown that ovine MSC share similar properties with human and rodents MSC, including their capacity for clonogenic growth and multiple stromal lineage differentiation. In the present study, ovine bone marrow derived MSCs positively express cell surface markers associated with MSC such as CD29, CD44 and CD166, and lacked expression of CD14, CD31 and CD45. Under serum-deprived conditions, proliferation of MSC occurred in response to EGF, PDGF, FGF-2, IGF-1 and most significantly TGF-α. While subcutaneous transplantation of ovine MSC in association with a ceramic HA/TCP carrier into immunocomprimised mice resulted in ectopic osteogenesis, adipogenesis and haematopoietic-support activity, transplantation of these cells within a gelatin sponge displayed partial chondrogenesis. The comprehensive characterisation of ovine MSC described herein provides important information for future translational studies involving ovine MSC. J. Cell. Physiol. 219: 324–333, 2009. © 2008 Wiley-Liss, Inc.