Heterotopic ossification (HO) is a complication of musculoskeletal injury characterized by the formation of mature bone in soft tissues. The etiology of HO is unknown. We investigated the role of bone marrow derived progenitor cells in HO pathophysiology. We isolated the cells from HO specimens by cell explantation. Using flow cytometry and immunofluorescence microscopy, we found that 35 to 65% of the HO cells exhibit a bone marrow derived fibrocyte profile consisting in spindle-shaped morphology associated with type 1 pro-collagen and LSP1 expression. When cultured in osteogenic differentiation medium, active machinery for bone mineralization (high gene expression of Anx2, TNAP, and Pit-1), and calcium/phosphate deposits were found. Interestingly, interferon-alpha 2b significantly reduced the proliferation rate and COL1 gene expression in HO cells. We have characterized a novel subset of bone marrow derived progenitor cells in the HO specimens. The findings from this research study will provide new insights into the development of HO in burn patients.