Fracture healing is a complex process that relies heavily on the carefully orchestrated expansion and differentiation of periosteal mesenchymal progenitor cells (MSC). Identification of new markers for periosteal MSCs is essential for the development of fracture therapeutics. Expression of the matricellular protein thrombospondin-2 (TSP2) increases during early fracture healing; however, it is currently unknown what cell population expresses TSP2. Using a TSP2 GFP reporter mouse and a stabilized murine fracture model, we characterized the expression of TSP2 during the inflammatory, soft callus formation, and hard callus formation phases of fracture healing. In addition, using TSP2 GFP positive cells harvested from reporter mouse cells, we characterized the cell population using flow cytometry and colony formation assays. In uninjured diaphyseal bone, we observed TSP2 expression in the cells located along the inner periosteum. We also observed a population of TSP2 expressing cells in undifferentiated regions of early fracture callus and along the periphery of the callus. Later in callus development, TSP2 cells were broadly distributed in the undifferentiated callus, but GFP was not expressed by chondrocytes. Flow cytometry confirmed that the majority of TSP2 expressing cells were positive for traditional murine MSC markers. Our in vitro assays further supported these findings by demonstrating all adherent and colony-forming cells expressed TSP2. Taken together, our results suggest that TSP2 is expressed by undifferentiated MSCs, but downregulated in chondrocytes. Clinical significance: expression of the matricellular protein TSP2 is a promising new marker to identify MSCs in early fracture healing.