We have previously suggested that microvascular pericytes can differentiate into fibroblast-like, type I collagen-producing cells during excessive dermal scarring in vivo (Sundberg, C., Ivarsson, M., Gerdin, B., and Rubin, K., Lab. Invest. 74, 454-468, 1996). Here we have investigated to what extent pericytes derived from microvessels of full-term human placenta exhibited this capacity in vitro. Vascular fragments of human term placenta were isolated by enzymatic digestion and separation in Percoll. Their microvascular origin was ascertained by confocal microscopy using antibodies specific for endothelial cells (PAL-E) and pericytes (high-molecular-weight-melanoma-associated antigen). When vascular fragments were cultured in vitro, large cells with irregular edges migrated out from the fragments. After 4-6 days in culture, these cells started to proliferate and reached near confluence after approximately 8 days. The cultures were not overgrown by clones of cells with a high proliferative capacity, as demonstrated by cell membrane fluorescence staining and Ki67 expression. Expression of PAL-E, high-molecular-weight-melanoma-associated antigen, smooth muscle alpha-actin, desmin, and collagen synthesis (prolyl-4-hydroxylase and type I procollagen, as well as collagen pro-alpha1(I) mRNA) were followed during a culture period of 8 days. The cells were PAL-E negative but expressed high-molecular-weight-melanoma-associated antigen, smooth muscle alpha-actin, and desmin. Based on morphology and expression of the various markers, the outgrowing cells were identified as pericytes. With time in culture the cells decreased their expression of all these markers and increased their expression of prolyl-4-hydroxylase, type I procollagen, and collagen pro-alpha1(I) mRNA. Metabolic labeling and SDS-PAGE analysis of labeled proteins revealed that type I collagen was the major collagen species synthesized in the cultures. Our results support the hypotheses that pericytes can leave the vasculature and differentiate into collagen-producing cells and that cultured "fibroblasts" are derived from pericytes.