Typical ex vivo bone morphogenetic-protein-2 (BMP-2) gene therapy for localized bone formation usually utilizes bone marrow stromal cells as gene delivering cells. Skin fibroblasts, which are abundant and easily obtained, have potential advantages for autologous transplantation, but this application has not been adequately investigated. The purpose of this study was to determine the osteogenetic potential of fibroblasts delivering human BMP-2 (hBMP-2) gene by a retroviral system. The phenotypes of osteogenesis in human dermal fibroblasts transduced with hBMP-2 were determined in vitro. Ectopic osteogenesis was evaluated following the injection of these cell xenografts into muscles of null mice, and the potential for orthotopic bone regeneration was evaluated from syngrafts and autografts of rat dermal fibroblasts in rat calvaria defects. The activity of alkaline phosphatase and expression of osteocalcin in fibroblasts transduced with hBMP-2 were increased, and ectopic osteogenesis could be detected in muscles from null mice. The syngrafts and autografts of rat dermal fibroblasts transduced with hBMP-2 gene significantly promoted bone repair and partially healed the calvarial defects. Syngrafts and autografts of rat fibroblasts transduced with hBMP-2 gene had greater average areas exhibiting an osteogenic response compared with the control. The success of bone regeneration in calvaria defects induced by the autologous hBMP-2-modified skin fibroblasts provides evidence that fibroblasts could be effectively used in ex vivo gene therapy for local bone repair. © 2009 Wiley-Liss, Inc.