Bone marrow-derived stromal cells have engendered interest because of their therapeutic potential for promoting tissue vascularization and repair. When mononuclear cells isolated from mouse bone marrow were cultured in DMEM supplemented with 10% fetal bovine serum, cell populations arose that showed rapid proliferation and loss of contact inhibition. These cells formed invasive soft tissue sarcomas after i.m. injection into nude or scid mice. I.v. injection resulted in the formation of tumor foci in the lungs. The tumors were transplantable into syngeneic immunocompetent mice. Direct injection of cultured cells into immunocompetent mice also resulted in tumor formation. Karyotype analysis showed that increased chromosome number and multiple Robertsonian translocations occurred at passage 3 coincident with the loss of contact inhibition. The remarkably rapid malignant transformation of cultured mouse bone marrow cells may have important implications for ongoing clinical trials of cell therapy and for models of oncogenesis.