The dental follicle is an ectomesenchymal tissue surrounding the developing tooth germ. It is believed that this tissue contains stem cells and lineage committed progenitor cells or precursor cells (PCs) for cementoblasts, periodontal ligament cells, and osteoblasts. In this study, we report the isolation of PCs derived from dental follicle of human third molar teeth. These fibroblast-like, colony forming and plastic adherent cells expressed putative stem cell markers Notch-1 and Nestin. We compared gene expressions of PCs, human mesenchymal stem cells (hMSCs), periodontal ligament cells (PDL-cells) and osteoblasts (MG63) for delimitation of PCs. Interestingly, PCs expressed higher amounts of insulin-like growth factor-2 (IGF-2) transcripts than hMSCs. Differentiation capacity was demonstrated under in vitro conditions for PCs. Long-term cultures with dexamethasone produced compact calcified nodules or appeared as plain membrane structures of different dimensions consisting of a connective tissue like matrix encapsulated by a mesothelium-like cellular structure. PCs differentially express osteocalcin (OCN) and bone sialoprotein (BS) after transplantation in immunocompromised mice but without any sign of cementum or bone formation. Therefore, our results demonstrate that cultured PCs are unique undifferentiated lineage committed cells residing in the periodontium prior or during tooth eruption.