The identification of the factors which regulate the proliferation and differentiation of cells of the osteoblast lineage remains one of the major challenges in the field of bone cell biology. Although considerable progress has been made in the isolation and culture of cells of the osteoblast lineage from both animal and, more recently, human bone, uncertainties have persisted as to the extent to which these cell populations retain the ability to differentiate into functional osteoblasts in vitro. The formation in vitro of mineralized nodules that exhibit the morphological, ultrastructural and biochemical characteristics of embryonic/woven bone formed in vivo, represents the first evidence that the differentiation of functional osteoblasts can occur in cultures of isolated animal bone-derived cell populations. It is clear, however, that the culture conditions employed at present only permit a small number of cells to differentiate to the extent of being capable of organising their extracellular matrix into a structure that resembles that of bone. Moreover, it has generally been found that the reproducible mineralization of this extracellular matrix requires supplementation of the culture medium with mM concentrations of beta-GP, which raises doubts as to the physiological relevance of this process. The formation of nodules has also been observed in cultures of human bone-derived cells. As found in cultures of animal bone-derived cells, reproducible mineralization of these nodules will occur in the presence of beta-GP. We have shown, however, that in the presence of the long acting ascorbate analogue Asc-2-P, the formation and mineralization of nodules can occur in the absence of beta-GP. The nodules formed in human bone-derived cell cultures have yet to be characterized as rigorously as those formed in cultures of animal bone-derived cells and thus it remains to be shown that they resemble bone formed in vivo.