Recent studies have suggested that bone marrow cells possess a broad differentiation potential, being able to form new liver cells, cardiomyocytes and neurons. Several groups have attributed this apparent plasticity to 'transdifferentiation'. Others, however, have suggested that cell fusion could explain these results. Using a simple method based on Cre/lox recombination to detect cell fusion events, we demonstrate that bone-marrow-derived cells (BMDCs) fuse spontaneously with neural progenitors in vitro. Furthermore, bone marrow transplantation demonstrates that BMDCs fuse in vivo with hepatocytes in liver, Purkinje neurons in the brain and cardiac muscle in the heart, resulting in the formation of multinucleated cells. No evidence of transdifferentiation without fusion was observed in these tissues. These observations provide the first in vivo evidence for cell fusion of BMDCs with neurons and cardiomyocytes, raising the possibility that cell fusion may contribute to the development or maintenance of these key cell types.