The process of biomineralization has been examined during osteoblastic differentiation of bone marrow stroma cells (BMSCs) from embryonic chick in culture and in periosteum itself by a number of different techniques including transmission and scanning electron microscopy. In cell culture of BMSCs at days 20-25, crystals were accumulated extracellularly in the collagen matrix, resulting in large plate-like crystallites and noncollagen associated on the culture disk surface. In contrast, up to days 10-18, mainly intracellular mineralization was visible by numerous needle-like crystal structures in the cell cytoplasm and in vacuoles. After 20-30 days, the crystal content of these vacuoles is released, most probably by membrane fusion to the outside of the cells. Energy-dispersive X-ray analysis (EDX), electron spectroscopic imaging, and electron energy loss spectroscopy demonstrated that Ca, O, and P are located in the intra- and extracellular needle-like crystals. From EDX spectra a Ca/P ratio of 1.3 was estimated for the intracellular structures and a Ca/P ratio of 1.5, for the extracellular material (for comparison, the Ca/P ratio in tibiae is 1.6). X-ray diffraction and quantitative infrared spectral analyses also demonstrated an increase of crystalline bone apatite along the mineralization process. In addition to the finding in vitro, the presence of intracellular needle-like crystals in vacuoles could be demonstrated in vivo in osteoblastic cells of the periosteum in tibia of day 11. The results are in favor of a novel model for mineralization by osteoblasts, in which amorphous Ca/P material is directly secreted via an exocytotic process from vacuoles of the osteoblast, deposited extracellularly, propagated into the collagen fibril matrix, and matured to hydroxyapatite.