Human bone cell cultures were established by maintaining collagenase-treated bone fragments in low Ca++ medium. The resulting cell cultures exhibited a high level of alkaline phosphatase activity and produced a significant increase in intracellular cAMP when exposed to the 1-34 fragment of human parathyroid hormone. With continued culture, the cells formed a thick, extracellular matrix that mineralized when cultures were provided daily with normal levels of calcium, fresh ascorbic acid (50 micrograms/ml) and 10 mM beta-glycerol phosphate. Biosynthetically, these cells produced type I collagen (without any type III collagen), and the bone-specific protein, osteonectin. In addition, the cells produced sulfated macromolecules electrophoretically identical to those positively identified as the bone proteoglycan in parallel cultures of fetal bovine bone cells. This technique provides a useful system for the study of osteoblast metabolism in vitro.