In vivo gene transfer is a recently developed device for efficient delivery of a therapeutic recombinant protein. We formulated the hypothesis that a high level of expression of bone morphogenetic protein 2 (BMP-2) could be a future therapeutic modality in terms of inducing substantial bone formation in vivo. First, to test this hypothesis, adenoviruses carrying BMP-2 gene were directly injected into the soleus muscle of adult rat. The BMP-2 gene was successfully overexpressed in the target muscle by adenovirus-mediated transfer, whereas bone formation in and around the muscle failed to occur in this case. Second, to recruit putative osteoprogenitor cells, we then induced ischemic degeneration of the target muscle by orthotopically grafting it simultaneously with the gene transfer. The combination of BMP-2 gene transfer and orthotopic muscle grafting resulted in successful ossification of almost the whole grafted muscle, whereas neither muscle grafting alone nor the combination of muscle grafting and adenovirus-mediated transfer of reporter gene LacZ induced any bone formation in the muscle. The ossification process was evident by positive von Kossa staining of the histological sections and roentgenographical radio-opacity of the region. It was also found that the BMP-2 transgene overexpressed in grafted muscles inhibited muscle regeneration, which should otherwise follow the muscle degeneration. We further demonstrated an up-regulation of BMP receptor type IA in grafted muscles, suggesting its involvement in the bone-formation process. In conclusion, overexpression of BMP-2 gene induced massive heterotopic ossification in skeletal muscles under graft-induced ischemic degeneration, which possibly up-regulates osteoprogenitor cells in situ.