Bone morphogenetic protein 2 (BMP2)-induced heterotopic bone formation (HBF) starts synchronously from zero upon BMP2 induction, which is advantageous for lineage tracking. The studies reported here in GLAST-Cre Ert2 :tdTomato red (TR) floxSTOPflox mice during BMP2-induced HBF show 78.8 ± 11.6% of chondrocytes and 86.5 ± 1.9% of osteoblasts are TR + after approximately 1 week. Clustering after single-cell RNAseq resulted in nine cell types, and analysis revealed one as a highly replicating stem-like cell (RSC). Pseudotiming suggested that the RSC transitions to a mesenchymal stem-like cell that simultaneously expresses multiple osteoblast and chondrocyte transcripts (chondro-osseous progenitor [COP]). RSCs and COPs were isolated using flow cytometry for unique surface markers. Isolated RSCs (GLAST-TR + Hmmr + Cd200 −) and COPs (GLAST-TR + Cd200 + Hmmr −) were injected into the muscle of mice undergoing HBF. Approximately 9% of the cells in heterotopic bone (HB) in mice receiving RSCs were GLAST-TR + , compared with less than 0.5% of the cells in mice receiving COPs, suggesting that RSCs are many times more potent than COPs. Analysis of donor-derived TR + RSCs isolated from the engrafted HB showed approximately 50% were COPs and 45% were other cells, presumably mature bone cells, confirming the early nature of the RSCs. We next isolated RSCs from these mice (approximately 300) and injected them into a second animal, with similar findings upon analysis of HBF. Unlike other methodology, single cell RNAseq has the ability to detect rare cell populations such as RSCs. The fact that RSCs can be injected into mice and differentiate suggests their potential utility for tissue regeneration.