The process of osteoblast switching to alternative mesenchymal phenotypes is incompletely understood. In this study, we tested the ability of the osteoblast/preosteocyte osteogenic cell line, MLO-A5, to also differentiate into either adipocytes or chondrocytes. MLO-A5 cells expressed a subset of skeletal stem cell markers, including Sca-1, CD44, CD73, CD146, and CD166. Confluent cultures of cells underwent differentiation within 3 days upon the addition of osteogenic medium. The same cultures were capable of undergoing adipogenic and chondrogenic differentiation under lineage-appropriate culture conditions, evidenced by lineage-specific gene expression analysis by real-time reverse-transcription-PCR, and by Oil Red O and alcian blue (pH 2.5) staining, respectively. Subcutaneous implantation of MLO-A5 cells in a gel foam into NOD SCID mice resulted in a woven bone-like structure containing embedded osteocytes and regions of cartilage-like tissue, which stained positive with both alcian blue (pH 2.5) and safranin O. Together, our findings show that MLO-A5 cells, despite being a strongly osteogenic cell line, exhibit characteristics of skeletal stem cells and display mesenchymal lineage plasticity in vitro and in vivo. These unique characteristics suggest that this cell line is a useful model with which to study aging and disease-related changes to the mesenchymal lineage composition of bone.