The use of multipotent human mesenchymal stem cells (hMSCs) for tissue engineering has been a subject of extensive research. The donor variation in growth, differentiation and in vivo bone forming ability of hMSCs is a bottleneck for standardization of therapeutic protocols. In this study, we isolated and characterized hMSCs from 19 independent donors, aged between 27 and 85 years, and investigated the extent of heterogeneity of the cells and the extent to which hMSCs can be expanded without loosing multipotency. Dexamethasone-induced ALP expression varied between 1.2- and 3.7-fold, but no correlation was found with age, gender, or source of isolation. The cells from donors with a higher percentage of ALP-positive cells in control and dexamethasone-induced groups showed more calcium deposition than cells with lower percentage of ALP positive cells. Despite the variability in osteogenic gene expression among the donors tested, ALP, Collagen type 1, osteocalcin, and S100A4 showed similar trends during the course of osteogenic differentiation. In vitro expansion studies showed that hMSCs can be effectively expanded up to four passages (approximately 10-12 population doublings from a P0 culture) while retaining their multipotency. Our in vivo studies suggest a correlation between in vitro ALP expression and in vivo bone formation. In conclusion, irrespective of age, gender, and source of isolation, cells from all donors showed osteogenic potential. The variability in ALP expression appears to be a result of sampling method and cellular heterogeneity among the donor population.