In diabetes or atherosclerosis, ectopic bone, fat, cartilage, and marrow often develop in arteries. However the mechanism is unknown. We have previously identified a subpopulation of vascular cells (calcifying vascular cells, CVC), derived by dilutional cloning of bovine aortic medial cells, and showed that they undergo osteoblastic differentiation and mineralization. We now show that CVC have the potential to differentiate along other mesenchymal lineages. To determine the multilineage potential of CVC, molecular and functional markers of multiple mesenchymal lineages were assessed. Chondrogenic potential of CVC was evidenced by expression of types II and IX collagen and cytochemical staining for Alcian blue. Leiomyogenic potential of CVC was evidenced by the expression of smooth muscle-alpha actin, calponin, caldesmon, and myosin heavy chain. Stromogenic potential of CVC was evidenced by the ability to support growth of colony-forming units of hematopoietic progenitor cells from human CD34+ umbilical cord blood cells for a period of 5 weeks. Adipogenic potential was not observed. CVC were immunopositive to antigens to CD29 and CD44 but not to CD14 or CD45, consistent with other mesenchymal stem cells. CVC retained multipotentiality despite passaging and expansion through more than 20 to 25 population triplings, indicating a capacity for self-renewal. These results suggest that the artery wall contains cells that have the potential for multiple lineages similar to mesenchymal stem cells but with a unique differentiation repertoire.