Mesenchymal stem cells (MSCs) isolated from umbilical card blood were capable of differentiated in to multiple mesenchymal cell lineages. The objective of the current study was to establish a reproducible system for the in vitro osteogenic differentiation of human MSCs, and to characterize the effect of changes in the microenvironment upon differentiation. In our previous studies, MSCs cultured in varying concentrations of L-ascorbic acid (50 μM to 500 μM) had shown the various levels of osteoblast differentiation, as determined by morphology, alkaline phosphatase activity, modulations in osteocalcin mRNA expression, and mineralized extracellular matrix (ECM) deposition holding inorganic hydroxyapatite (HA) and Tricalcium phosphate (TCP). In present study, we noticed a study increase in APase activity up to 250 μM L-ascorbic acid and by end of 16 days, cells gained cuboidal morphology, which is characteristic feature of osteoblasts. The intense sharp difractograms (peaks) between 30°–35° demonstrate the deposition of HA and TCP, which are major inorganic components of bone. The reproducible results of our studies provided a useful model for evaluating the factors responsible for the stepwise progression of cells from undifferentiated precursors to secretary osteoblasts, and eventually terminally differentiated osteocytes.