Despite significant progress in our understanding of mesenchymal stem cell (MSC) biology during recent years, much of the information is based on experiments using in vitro culture-selected stromal progenitor cells. Therefore, the natural cellular identity of MSCs remains poorly defined. Numerous studies have reported that CD44 expression is one of the characteristics of MSCs in both humans and mice; however, we here have prospectively isolated bone marrow stromal cell subsets from both human and mouse bone marrow by flow cytometry and characterized them by gene expression analysis and function assays. Our data provide functional and molecular evidence suggesting that primary mesenchymal stem and progenitor cells of bone marrow reside in the CD44(-) cell fraction in both mice and humans. The finding that these CD44(-) cells acquire CD44 expression after in vitro culture provides an explanation for the previous misconceptions concerning CD44 expression on MSCs. In addition, the other previous reported MSC markers, including CD73, CD146, CD271, and CD106/VCAM1, are also differentially expressed on those two cell types. Our microarray data revealed a distinct gene expression profile of the freshly isolated CD44(-) cells and the cultured MSCs generated from these cells. Thus, we conclude that bone marrow MSCs physiologically lack expression of CD44, highlighting the natural phenotype of MSCs and opening new possibilities to prospectively isolate MSCs from the bone marrow.