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Background  Mesenchymal progenitor cells (MPCs) have been isolated from a variety of connective tissues, and are commonly called “mesenchymal stem cells” (MSCs). A stem cell is defined as having robust clonal self-renewal and multilineage differentiation potential. Accordingly, the term “MSC” has been criticised, as there is little data demonstrating self-renewal of definitive single-cell-derived (SCD) clonal populations from a mesenchymal cell source.    Methodology/Principal Findings  Here we show that a tractable MPC population, human umbilical cord perivascular cells (HUCPVCs), was capable of multilineage differentiation  in vitro  and, more importantly, contributed to rapid connective tissue healing  in vivo  by producing bone, cartilage and fibrous stroma. Furthermore, HUCPVCs exhibit a high clonogenic frequency, allowing us to isolate definitive SCD parent and daughter clones from mixed gender suspensions as determined by Y-chromosome fluorescent in situ hybridization.    Conclusions/Significance  Analysis of the multilineage differentiation capacity of SCD parent clones and daughter clones enabled us to formulate a new hierarchical schema for MSC self-renewal and differentiation in which a self-renewing multipotent MSC gives rise to more restricted self-renewing progenitors that gradually lose differentiation potential until a state of complete restriction to the fibroblast is reached.

Human Mesenchymal Stem Cells Self-Renew and Differentiate According to a Deterministic Hierarchy