Cells derived from postpartum tissue and methods for their isolation and induction to differentiate to cells of a chondrogenic or osteogenic phenotype are provided by the invention. The invention further provides cultures and compositions of the postpartum-derived cells and products related thereto. The postpartum-derived cells of the invention and products related thereto have a plethora of uses, including but not limited to research, diagnostic, and therapeutic applications, for example, in the treatment of bone and cartilage conditions.