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During the last decade, extensive research has been performed in the field of orthopedic medicine to develop cell-based therapies for the restoration of injured bone tissue. We previously demonstrated that human primary fetal bone cells (HFBCs) associated with porous scaffolds induced a bone formation in critical calvaria defect; however, the environmental factors regulating their behavior in culture have not been identified. HFBCs (human fetal femur,12 week development) were compared to marrow-derived human mesenchymal stem cells (HMSCs) for their capacity to proliferate and differentiate into osteoblasts under various culture conditions. When cultured in standard αMEM medium, PDGF and FGF-2 increased cell proliferation of both cell types. Investigation of the differentiating capacity of HFBCs and HMSCs in a normal culture medium indicated that HFBCs expressed higher expression levels of RUNX2, OSX, and osteogenic markers compared with HMSCs, while SOX9 was expressed at very low levels in both cells types. However, HMSCs, but not HFBCs enhanced osteoblastic markers in response to osteogenic factors. Surprisingly, BMP-2 with osteogenic factors increased cell numbers and reduced osteoblastic differentiation in HFBCs with the opposite effect seen in HMSCs. Associated with a higher expression of osteoblastic markers, HFBCs produced a higher calcified extra cellular matrix compared with HMSCs. Taken together, data presented in this study suggest that HFBCs have characteristics of osteoprecursor cells that are more advanced in their osteogenesis development compared with mesenchymal stem cells, making fetal cells an interesting biological tool for treatment of skeletal defects and diseases.