Mesenchymal stem cells (MSCs) are defined as cells that undergo sustained in vitro growth and are able to give rise to multiple mesenchymal lineages. Although MSCs are already used in regenerative medicine little is known about their in vivo behavior and developmental derivation. Here, we show that the earliest wave of MSC in the embryonic trunk is generated from Sox1⁺ neuroepithelium but not from mesoderm. Using lineage marking by direct gfp knock-in and Cre-recombinase mediated lineage tracing, we provide evidence that Sox1⁺ neuroepithelium gives rise to MSCs in part through a neural crest intermediate stage. This pathway can be distinguished from the pathway through which Sox1⁺ cells give rise to oligodendrocytes by expression of PDGFRβ and A2B5. MSC recruitment from this pathway, however, is transient and is replaced by MSCs from unknown sources. We conclude that MSC can be defined as a definite in vivo entity recruited from multiple developmental origins.