Human mesenchymal stem cells have attracted significant attention during the last decade as a versatile tool for cell therapy, gene therapy and tissue engineering. The existence of mesenchymal stem cells in adult tissues and their capacity for differentiation into multiple lineages are major benefits for clinical applications, circumventing the ethical and safety concerns surrounding the use of embryonic stem cells. It has been long established that mesenchymal stem cells have the potential to differentiate into mesenchymal lineages such as bone, cartilage and adipose tissue. Recent studies have uncovered the potential of mesenchymal stem cells to differentiate into endodermal and ectodermal derivatives, suggesting a greater plasticity than originally envisaged. In the current study, a novel approach using the chick embryo was developed to investigate the differentiation potential of bone marrow-derived human mesenchymal stem cells when exposed to developmental signals in vivo. In order to investigate the suitability of the chick embryo as a host, mesenchymal stem cells were first transplanted into fore- and hind limb of stage 17 chick embryos. Expression of differentiation markers were subsequently analysed using immunocytochemistry and molecular analysis. Expression of osteogenic-specific genes such as alkaline phosphatase, RUNX2 and osteocalcin was observed in human mesenchymal stem cells grafted into wing and limb buds of the chick embryo. To investigate the extra-mesodermal differentiation potential of mesenchymal stem cells, expression of lineage-specific genes was subsequently analysed after grafting mesenchymal stem cells into the chick neural crest. Mesenchymal stem cells showed extensive migration through head mesenchyme after injection into the chick neural crest. Injected cells also significantly up-regulated neural crest specific markers such as SLUG, FOXD3 and MITF, suggesting differentiation toward neural crest cell lineages.