GFP reporter mice previously developed to assess levels of osteoblast differentiation were employed in a tibial long bone fracture model using a histological method that preserves fluorescent signals in non-decalcified sections of bone. Two reporters, based on Col1A1 (Col3.6GFPcyan) and osteocalcin (OcGFPtpz) promoter fragments, were bred into the same mice to reflect an early and late stage of osteoblast differentiation. Three observations were apparent from this examination. First, the osteoprogenitor cells that arise from the flanking periosteum proliferate and progress to fill the fracture zone. These cells differentiate to osteoblasts, chondrocytes, to form the outer cortical shell. Second, the hypertrophic chondrocytes are dispersed and the cartilage matrix mineralized by the advancing Col3.6þ osteoblasts. The endochondral matrix is removed by the following osteoclasts. Third, a new cortical shell develops over the cartilage core and undergoes a remodeling process of bone formation on the inner surface and resorption on the outer surface. The original fractured cortex undergoes resorption as the outer cortical shell remodels inward to become the new diaphyseal bone. The fluorescent microscopy and GFP reporter mice used in this study provide a powerful tool for appreciating the molecular and cellular processes that control these fundamental steps in fracture repair, and may provide a basis for understanding fracture nonunion. ß