BackgroundMesenchymal progenitor cells (MPCs) have been isolated from a variety of connective tissues, and are commonly called “mesenchymal stem cells” (MSCs). A stem cell is defined as having robust clonal self-renewal and multilineage differentiation potential. Accordingly, the term “MSC” has been criticised, as there is little data demonstrating self-renewal of definitive single-cell-derived (SCD) clonal populations from a mesenchymal cell source.Methodology/Principal FindingsHere we show that a tractable MPC population, human umbilical cord perivascular cells (HUCPVCs), was capable of multilineage differentiation in vitro and, more importantly, contributed to rapid connective tissue healing in vivo by producing bone, cartilage and fibrous stroma. Furthermore, HUCPVCs exhibit a high clonogenic frequency, allowing us to isolate definitive SCD parent and daughter clones from mixed gender suspensions as determined by Y-chromosome fluorescent in situ hybridization.Conclusions/SignificanceAnalysis of the multilineage differentiation capacity of SCD parent clones and daughter clones enabled us to formulate a new hierarchical schema for MSC self-renewal and differentiation in which a self-renewing multipotent MSC gives rise to more restricted self-renewing progenitors that gradually lose differentiation potential until a state of complete restriction to the fibroblast is reached.