The clonal multipotential RCJ 3.1 cell line, which gives rise to myotubes, adipocytes, chondrocytes, and osteoblasts, contains different progenitor subpopulations. By limiting dilution analysis, of 296 single colonies identified, ∼20% contained a single recognizable cell type, ∼10% contained two cell types, and ∼1% contained three cell types. We recloned RCJ 3.1 and isolated continuously growing subclones, including four novel bipotential (adipocytes/chondrocytes; adipocytes/myotubes and chondrocytes/myotubes) cell populations, whose phenotypes bred true. In the bipotential subclones, single colony analyses confirmed the presence of single cells which could both self-renew the bipotential progenitors and give rise to their respective committed monopotential lineages. Eight subclones were restricted to a single cell lineage and were considered monopotential; one of these is a novel cell line differentiating into cartilage. Thus, we have isolated unique monopotential and bipotential progenitor cell lines which provide a valuable model for studying the mechanisms leading to lineage restriction in mesenchymal populations. © 1990 Academic Press, Inc.