The hallmark of endochondral bone development is the presence of cartilaginous templates, in which osteoblasts and stromal cells are generated to form mineralized matrix and support bone marrow haematopoiesis. However, the ultimate source of these mesenchymal cells and the relationship between bone progenitors in fetal life and those in later life are unknown. Fate-mapping studies revealed that cells expressing cre-recombinases driven by the collagen II (Col2) promoter/enhancer and their descendants contributed to, in addition to chondrocytes, early perichondrial precursors before Runx2 expression and, subsequently, to a majority of osteoblasts, Cxcl12 (chemokine (C–X–C motif) ligand 12)-abundant stromal cells and bone marrow stromal/mesenchymal progenitor cells in postnatal life. Lineage-tracing experiments using a tamoxifen-inducible creER system further revealed that early postnatal cells marked by Col2–creER, as well as Sox9–creER and aggrecan (Acan)–creER, progressively contributed to multiple mesenchymal lineages and continued to provide descendants for over a year. These cells are distinct from adult mesenchymal progenitors and thus provide opportunities for regulating the explosive growth that occurs uniquely in growing mammals.