We have previously shown a population of putative mesenchymal stem cells in the connective tissue surrounding embryonic avian skeletal muscle. These cells differentiate into at least five recognizable phenotypes in culture: fibroblasts, chondrocytes, myotubes, osteoblasts, and adipocytes. We have now isolated a similar population of cells from fetal and newborn rat skeletal muscle. Cells from rat leg muscle were dissected, minced, and then enzymatically digested with a collagenase-dispase solution. The dissociated cells were plated and allowed to differentiate into two recognizable populations: myotubes and stellate mononucleated cells. The cells were then trypsinized, filtered through a 20 microm filter to remove the myotubes, frozen at -80 degrees C, then thawed and replated. In culture the cells maintained their stellate structure. However, under treatment with dexamethasone, a nonspecific differentiating agent, seven morphologic conditions emerged: cells with refractile vesicles that stained with Sudan black B (adipocytes), multinucleated cells that spontaneously contracted in culture and stained with an antibody to myosin (myotubes), round cells whose extracellular matrix stained with Alcian blue, pH 1.0 (chondrocytes), polygonal cells whose extracellular matrix stained with Von Kossa's stain (osteoblasts), cells with filaments that stained with an antibody to smooth muscle a-actin (smooth muscle cells), cells that incorporated acetylated low density lipoprotein (endothelial cells), and spindle-shaped cells that grew in a swirl pattern (fibroblasts). The initial population is tentatively classified as putative mesenchymal stem cells. The presence of these cells point to the existence of stem cells in the postembryonic mammal that could provide a basis for tissue regeneration as opposed to scar tissue formation during wound healing.