Stem cell-based strategies for bone regeneration, which use calcium phosphate (CaP)-based biomaterials in combination with developmentally relevant progenitor populations, have significant potential for clinical repair of skeletal defects. However, the exact mechanism of action and the stem cell-host-material interactions are still poorly understood. We studied if pre-conditioning of human periosteum-derived cells (hPDCs) in vitro could enhance, in combination with a CaP-based biomaterial carrier, ectopic bone formation in vivo. By culturing hPDCs in a biomimetic calcium (Ca2+) and phosphate (P-i) enriched culture conditions, we observed an enhanced cell proliferation, decreased expression of mesenchymal stem cell (MSC) markers and upregulation of osteogenic genes including osterix, Runx2, osteocalcin, osteopontin, and BMP-2. However, the in vitro pre-conditioning protocols were non-predictive for in vivo ectopic bone formation. Surprisingly, culturing in the presence of Ca2+ and P-i supplements resulted in partial or complete abrogation of in vivo ectopic bone formation. Through histological, immunohistochemical and microfocus X-ray computed tomography (mu CT) analysis of the explants, we found that in situ proliferation, collagen matrix deposition and the mediation of osteoclastic activity by hPDCs are associated to their ectopic bone forming capacity. These data were validated by the multivariate analysis and partial least square regression modelling confirming the non-predictability of in vitro parameters on in vivo ectopic bone formation. Our series of experiments provided further insights on the stem cell-host-material interactions that govern in vivo ectopic bone induction driven by hPDCs on Cap-based biomaterials. (c) 2012 Elsevier Ltd. All rights reserved.