Abstract Bone marrow contains hematopoietic and non-hematopoietic stem cells. Although the character of hematopoietic stem cells (HSCs) in vivo has been extensively studied, our understanding of non-hematopoietic stem cells is derived only from in vitro expanded culture such as mesenchymal stem cells (MSCs). Since the number of non-hematopoietic stem cells in bone marrow is small, their characteristics, anatomical location and physiological role in vivo remain unknown. We attempted to overcome this problem by introducing a novel method. We extracted bone marrow cells from osteoblastic zone by enzymatic digestion. Bone marrow extracted cells (BMECs) contained non-hematopoietic cells (CD45−/Ter-119− cells) more than flushed out bone marrow cells (BMCs). Non-hematopoietic cells in BMECs were divided into two types, CD34+ (BME 34+) cells and CD34− (BME 34−) cells. When BME 34− cells were cultured to expand to a confluent layer in MSC culture condition, they formed fibroblastic cells, which have the ability to differentiate into osteocytes, chondrocytes and adipocytes, indicating that BME 34− cells are the in vivo origin of MSCs. On the other hand, BME CD34+ cells contained mostly non-hematopoietic SP fraction and they were Sca-1+ cells. Immunohistochemical analyses show that CD31-BME 34+ cells localized on osteoblasts and endothelial cells in bone marrow. When BME 34+ cells were co-cultured with stromal (OP9) cells, they formed a colony of myogenic cells, endothelial cells or adipogenic cells. However, different from BME 34− cells, fibroblastic cells expanded from BME 34+ cells did not differentiate to osteocytes, chondrocytes or adipocytes in MSC culture condition. When 4,000-6,000 BME 34+ cells were transplanted into irradiated mice, these cells engrafted as non-hematopoietic Vimentin+ fibroblastic-like cells in various organs such as liver, spleen, pancreas, colon, intestine, kidney, skin, brain, lung, heart, skeletal muscle, and bone marrow. In spleen and liver, transplanted cells formed clusters of Vimentin+ fibroblastic cells indicating that BME 34+ cells have ability to expand in vivo to some extent. When BME 34+ cells were directly injected into tibial muscles which were damaged by cardiotoxin, these cells gave rise to mature skeletal muscle cells and endothelial cells. In summary, these studies show distinguishable two types of non-hematopoietic stem cells in bone marrow. It is possible that mobilization and recruitment of these bone marrow-derived non-hematopoietic stem cells play a major role in the setting of wound healing, organ regeneration and tumor growth. In addition, non-hematopoietic two types of BMECs may contribute to clarify the debate on the stem cell plasticity of bone marrow cells.