Single-cell suspensions obtained from sequential enzymatic digestions of fetal rat calvaria were grown in long-term culture in the presence of ascorbic acid, Na beta-glycerophosphate, and dexamethasone to determine the capacity of these populations to form mineralized bone. In cultures of osteoblastlike cells grown in the presence of ascorbic acid and beta-glycerophosphate or ascorbic acid alone, three-dimensional nodules (approximately 75 micron thick) covered by polygonal cells resembling osteoblasts could be detected 3 days after confluency. The nodules became macroscopic (up to 3 mm in diameter) after a further 3-4 days. Only in the presence of organic phosphate did they mineralize. Nodules did not develop without ascorbic acid in the medium. Dexamethasone caused a significant increase in the number of nodules. Histologically, nodules resembled woven bone and the cells covering the nodules stained strongly for alkaline phosphatase. Immunolabeling with specific antibodies demonstrated intense staining for type I collagen that was mineral-associated, a weaker staining for type III collagen and osteonectin, and undetectable staining for type II collagen. Nodules did not develop from population I and the number of nodules formed by populations II-V bore a linear relationship to the number of cells plated (r = .99). The results indicate that enzymatically released calvaria cells can form mineralized bone nodules in vitro in the presence of ascorbic acid and organic phosphate.