This report describes the proliferation and the expression of Cbfa-1 in a rare case of peripheral osteo-chondroma arising from the mandibular oral mucosa of an edentulous alveolar ridge. Histologically, the lesion consisted of mesenchymal cells with either bone or cartilage tissue in the center. Almost all the tumor cells were reactive for PCNA, however, only the cells around the bone and cartilage tissues were reactive for Cbfa-1. These results suggest that both the bone and the cartilage tissues in this case were produced by mesenchymal cells that originated from the peripheral periosteum of the alveolar ridge. Furthermore, we have shown that immunohistochemical staining for PCNA and Cbfa-1 can be used to investigate lesions with bone or cartilage formation and to distinguish between those produced by osteogenic cells from those that are just reactive and produced by dystrophic calcification.