Keratocytes of the corneal stroma secrete a specialized extracellular matrix essential for vision. These quiescent cells exhibit limited capacity for self-renewal and after cell division become fibroblastic, secreting nontransparent tissue. This study sought to identify progenitor cells for human keratocytes. Near the corneal limbus, stromal cells expressed ABCG2, a protein present in many adult stem cells. The ABCG2-expressing cell population was isolated as a side population (SP) by cell sorting after exposure to Hoechst 33342 dye. The SP cells exhibited clonal growth and continued to express ABCG2 and also PAX6, product of a homeobox gene not expressed in adult keratocytes. Cloned SP cells cultured in medium with fibroblast growth factor-2 lost ABCG2 and PAX6 expression and upregulated several molecular markers of keratocytes, including keratocan, aldehyde dehydrogenase 3A1, and keratan sulfate. Cloned corneal SP cells under chondrogenic conditions produced matrix staining with toluidine blue and expressed cartilage-specific markers: collagen II, cartilage oligomatrix protein, and aggrecan. Exposure of cloned SP cells to neurogenic culture medium upregulated mRNA and protein for glial fibrillary acidic protein, neurofilament protein, and beta-tubulin II. These results demonstrate the presence of a population of cells in the human corneal stroma expressing stem cell markers and exhibiting multipotent differentiation potential. These appear to be the first human cells identified with keratocyte progenitor potential. Further analysis of these cells will aid elucidation of molecular mechanisms of corneal development, differentiation, and wound healing. These cells may be a resource for bioengineering of corneal stroma and for cell-based therapeutics.