JC virus (JCV), a common human polyomavirus, is the etiological agent of the demyelinating disease, progressive multifocal leukoencephalopathy (PML). In addition to its role in PML, studies have demonstrated the transforming ability of the JCV early protein, T-antigen, and its association with some human cancers. JCV infection occurs in childhood and latent virus is thought to be maintained within the bone marrow, which harbors cells of hematopoietic and non-hematopoietic lineages. Here we show that non-hematopoietic mesenchymal stem cells (MSCs) isolated from the bone marrow of JCV T-antigen transgenic mice give rise to JCV T-antigen positive cells when cultured under neural conditions. JCV T-antigen positive cells exhibited neural crest characteristics and demonstrated p75, SOX-10 and nestin positivity. When cultured in conditions typical for mesenchymal cells, a population of T-antigen negative cells, which did not express neural crest markers arose from the MSCs. JCV T-antigen positive cells could be cultured long-term while maintaining their neural crest characteristics. When these cells were induced to differentiate into neural crest derivatives, JCV T-antigen was downregulated in cells differentiating into bone and maintained in glial cells expressing GFAP and S100. We conclude that JCV T-antigen can be stably expressed within a fraction of bone marrow cells differentiating along the neural crest/glial lineage when cultured in vitro. These findings identify a cell population within the bone marrow permissible for JCV early gene expression suggesting the possibility that these cells could support persistent viral infection and thus provide clues toward understanding the role of the bone marrow in JCV latency and reactivation. Further, our data provides an excellent experimental model system for studying the cell-type specificity of JCV T-antigen expression, the role of bone marrow-derived stem cells in the pathogenesis of JCV-related diseases and the opportunities for the use of this model in development of therapeutic strategies.