Described is a method of expanding human progenitor cells by suspension culturing under non-static conditions. The culturing method provides a three-dimensional space for the rapid expansion of desirable progenitors. By this method, a new compartment of multipotential progenitor cells has been identified, which give rise under differentiation conditions to progeny including osteoblasts, chondrocytes, myoblasts, adipocytes, and other non-hematopoietic cell types. Their use in cell and tissue-based engineering is described.