Pericytes are defined by their location in vivo; the pericyte partially surrounds the endothelial cell of the microvessel and shares a common basement membrane with it. As an integral part of the microvasculature, pericytes play a fundamental role in maintaining local and tissue homeostasis. Current evidence also suggests that pericytes function as progenitor cells capable of differentiating into a variety of different cell types including osteoblasts, chondrocytes and adipocytes. It is now apparent that cells resembling microvascular pericytes, and termed 'pericyte-like' cells, have a widespread distribution in vivo. Pericyte-like cells have been identified in the inner intima, the outer media, and in the vasa vasora of the adventitia of large, medium and small human arteries (1, 2). Moreover, recent studies have suggested that these cells may be responsible, at least in part, for mediating the calcification commonly associated with atherosclerosis (1, 3, 4). In this review, we a) examine the evidence that microvascular pericytes deposit a bone-like mineralised matrix in vitro, b) compare the morphological and biochemical properties of microvascular pericytes, calcifying vascular cells (CVCs) and 'classical' smooth muscle cells (SMCs) isolated from bovine aorta, c) demonstrate that microvascular pericytes deposit a well-organised matrix of bone, cartilage and fibrous tissue in vivo, and d) discuss recent studies designed to gain a better understanding of how pericyte differentiation is regulated.