Although the contribution of bone marrow-derived cells to regenerating skeletal muscle has been repeatedly documented, there remains considerable debate as to whether this incorporation is exclusively a result of inflammatory cell fusion to regenerating myofibers or whether certain populations of bone marrow-derived cells have the capacity to differentiate into muscle. The present study uses a dual-marker approach in which GFP(+) cells were intravenously transplanted into lethally irradiated beta-galactosidase(+) recipients to allow for simple determination of donor and host contribution to the muscle. FACS analysis of cardiotoxin-damaged muscle revealed that CD45(+) bone-marrow side-population (SP) cells, a group enriched in hematopoietic stem cells, can give rise to CD45(-)/Sca-1(+)/desmin(+) cells capable of myogenic differentiation. Moreover, after immunohistochemical examination of the muscles of both SP- and whole bone marrow-transplanted animals, we noted the presence of myofibers composed only of bone marrow-derived cells. Our findings suggest that a subpopulation of bone marrow SP cells contains precursor cells whose progeny have the potential to differentiate towards a muscle lineage and are capable of de novo myogenesis following transplantation and initiation of muscle repair via chemical damage.