In the present study, periosteal tissue explants were explored as a substratum for the production of endochondral bone tissue in vitro. Endochondral bone is formed when mesenchymal stem cells (MSCs) proceed through the chondrogenic lineage to produce a transitory cartilage template which eventually is ossified. The periosteum is of interest as this tissue is found enveloping long bones and has been shown to contain a resident cellular population capable of generating endochondral bone. Endochondral ossification was induced in periosteal explants through the successive application of chondrogenic and hypertrophic/osteogenic media simulating the in vivo progression of the process. Different chondrogenic and osteogenic media types were utilized in order to assess the best method for producing osseous tissue. The results indicated that endochondral bone could be produced from periosteum tissue in vitro. It was determined that chondrogenic culture with transforming growth factor β1 (TGFβ1) led to the development of immature (resting or proliferative) cartilage tissue while chondrogenic culture with bone morphogenetic protein 2 (BMP2) produced mature (hypertrophic or calcified) cartilage and osseous tissue. Osteogenic media generally failed to improve ossification in cartilaginous explants but did affect their progression through the endochondral process. Cartilaginous periosteum explants responded differently to osteogenic media types based on the method of chondrogenic pre-induction. Immature cartilage formed under TGFβ1 induction underwent maturation in osteogenic media with triiodothyronine (T3). Mature cartilage formed under BMP2 continued to undergo maturation in the presence of osteogenic media with BMP2 or T3. Overall, these findings suggested that BMP2 is crucial in the development of endochondral bone from periosteal explants in vitro and that the osteogenic media is unnecessary in promoting this process.