This study sought to identify critical determinants of mesenchymal stem cell (MSC) potency using in vitro and in vivo attributes of cells isolated from the bone marrow of age- and sex-matched donors. Adherence to plastic was not indicative of potency, yet capacity for long-term expansion in vitro varied considerably between donors, allowing the grouping of MSCs from the donors into either those with high-growth capacity or low-growth capacity. Using this grouping strategy, high-growth capacity MSCs were smaller in size, had greater colony-forming efficiency, and had longer telomeres. Cell-surface biomarker analysis revealed that the International Society for Cellular Therapy (ISCT) criteria did not distinguish between high-growth capacity and low-growth capacity MSCs, whereas STRO-1 and platelet-derived growth factor receptor alpha were preferentially expressed on high-growth capacity MSCs. These cells also had the highest mean expression of the mRNA transcripts TWIST-1 and DERMO-1. Irrespective of these differences, both groups of donor MSCs produced similar levels of key growth factors and cytokines involved in tissue regeneration and were capable of multilineage differentiation. However, high-growth capacity MSCs produced approximately double the volume of mineralized tissue compared to low-growth capacity MSCs when assessed for ectopic bone-forming ability. The additional phenotypic criteria presented in this study when combined with the existing ISCT minimum criteria and working proposal will permit an improved assessment of MSC potency and provide a basis for establishing the quality of MSCs prior to their therapeutic application.