The use of embryonic stem cell (ESC) derived cells has emerged as a potential alternative treatment for a number of degenerative diseases, including musculoskeletal diseases. Conventional ESC culturing methods use fetal. bovine serum (FBS) as a major supplemental component of culture media, which is undesirable for clinical applications. These cultures are usually performed in small-scale static vessels (gelatin-coated dishes), which limit the number of cells that can be generated. It is essential to develop effective, reproducible protocols for efficient scalable production of ESC-derived cells. Here we present serum-free bioreactor protocols for (1) expansion and (2) differentiation of embryonic stem cells to osteoblasts. Cultivation of mESCs in serum-free media, supplemented with 15% knockout serum replacement (KSR) resulted in a 27.1- and 48.6-fold expansion in static culture and suspension respectively by day 5 of culture. Further induction to osteoblasts with a differentiation cocktail was verified by up-regulation of osterix and osteocalcin. Mineralization was also enhanced, as indicated by an increase in the calcium deposition by osteogenic cells by day 28. These results will serve as the basis for developing protocols with human ESCs as a new treatment alternative for musculoskeletal diseases. Biotechnol. Bioeng. 2010;106: 829-840. (C) 2010 Wiley Periodicals, Inc.