It is a well established phenomenon that the epithelial lining of the urinary bladder (urothelium) when implanted into skeletal muscle induces ectopic ossification. However, despite numerous observations, this reaction is poorly understood. This research further studied this reaction by - (a) demonstrating the reaction in a suitable small animal model; (b) attempting to induce the reaction by implanting urothelial cells purified by cell culture techniques; and (c) comparing the bone forming reaction induced by implanted urothelium to the reaction induced by implanting Bone Marrow Stem Cells (BMSC's) and Osteophyte Stem Cells (OSC's). By demonstrating newly formed bone after the implantation of guinea pig urothelium into the skeletal muscle of a Severe Combined Immuno-Deficient Mouse (SCID-Mouse) this research demonstrated that a suitable small animal model had been established. This is despite inherent difficulties (particularly bacterial contamination) associated with establishing a primary cell culture of guinea pig urothelial cells. Additionally, the intramuscular ectopic osteoinductive potential of human BMSC's (hBMSC's) in the SCID-mouse has also been demonstrated. Confirming that the injection of cultured cells in suspension is an adequate intramuscular delivery technique, this research demonstrates that hBMSC's induce ectopic ossification by non-immunological means. This research has demonstrated a number of differences between urothelium induced ectopic ossification and ectopic ossification induced by BMSC's, suggesting they are two separate processes. This is important because the chemotaxis and subsequent osteogenic differentiation of BMSC's has previously been one of the more popular postulated mechanisms of urothelium induced ectopic ossification. Finally, this research has demonstrated the ectopic osteoinductive potential of stem cells isolated from the marrow of human osteophytes (human Osteophyte Stem Cells, hOSC's). This observation has not been previously reported, and will hopefully provide a valuable contribution to a body of knowledge that has important ramifications in both the treatment of osteoarthritis, and the use of BMSC's in tissue engineering.