Primary cell cultures from fetal bovine sternum were developed in Coon's modified Ham's F-12 medium containing 10% Nu-Serum, 1% Ultroser-G, and 200 mg of galactose per liter. Clones were obtained by colony isolation; one clone, BBE-1, was selected for characterization. BBE-1 cells exhibited typical endothelial morphology by light and electron microscopy and immunofluorescence for factor VIII-related antigen throughout their life span of 8 months. The cells showed mitogenic responses to endothelial cell growth factor, basic fibroblast growth factor, insulin-like growth factor types I and II, platelet-derived growth factor, ascorbic acid, and progesterone. Parathyroid hormone stimulated intracellular accumulation of cAMP in BBE-1 cells but not in endothelial cells from two other tissues. These clonal cells provide a useful system for studies on bone vasculature, including its interactions with other bone cells.