Cells, which differentiate into osteoblasts, are located in the endosteum and inner cellular layer of the periosteum.

Mesenchymal stem cells (MSC), which differentiate into osteoblasts, are located in the endosteum and inner cellular layer of the periosteum.
MSC are adult stem cells found in the bone marrow, but also can be found isolated in other tissues including cord blood, peripheral blood, fallopian tube, and fetal liver and lung.