During the healing process after bone fracture, soft callus forms adjacent to the fracture site, is replaced by hard callus, and is finally remodeled to the original bone configuration. Although the cambium layer of the periosteum is reported to play an essential role in callus formation, we still lack direct in vivo evidence of this. To investigate the cell lineage of the soft callus, we analyzed the process of fracture healing in Prx1-Cre;ROSA26 reporter (R26R), Col1a1(3.6 kb)-Cre;R26R, Col1a1(2.3 kb)-Cre;R26R, Sox9-CreERT2;R26R, and Sox9-LacZ mice with X-gal staining. In the Prx1-Cre;R26R, in which the cells of the periosteum stained for X-gal before fracture, all cells in the soft callus were X-gal positive, whereas in the Col1a1(3.6 kb)-Cre;R26R mice, the cells in the periosteum before fracture stained for X-gal and the soft callus was partly composed of X-gal-positive cells. In contrast, in the Col1a1(2.3 kb)-Cre;R26R mice, in which the mature osteoblasts in the cambium layer of the periosteum were marked before fracture, no cells in the soft callus at the fracture site were X-gal positive. These results suggest that most of the cells in the soft callus are derived from the mesenchymal progenitors in the periosteum, and not from mature osteoblastic cells. Interestingly, in the Sox9-LacZ mice, Sox9-expressing X-gal-positive cells emerged in the periosteum adjacent to the fracture site 3 days after fracture. We demonstrated this by injecting tamoxifen into the Sox9-CreERT2;R26R mice for 3 days after fracture, so that these Sox9-expressing periosteal cells gave rise to cells in the soft and hard calli. Our findings show that the periosteal cells in which Sox9 expression is induced just after fracture are the major source of the chondrocytes and osteoblasts in the fracture callus.