Top of pageAbstract Approximately six million fractures occur yearly in the United States. Ten to 15% of these will become delayed or nonunions, resulting in prolonged pain and frequently surgery, increasing the monetary burden on the health care system. Articular fractures are particularly problematic. Gene therapy may represent a viable treatment option. The purpose of our study was to create a clinically relevant animal model of articular fracture healing, and to evaluate use of genetically modified bone marrow-derived mesenchymal stem cells (BMDMSC) to heal bone and cartilage. Our hypothesis was that BMDMSC genetically modified to express bone morphogenetic protein (BMP)-2, delivered in a three-dimensional alginate (ALG) matrix, would augment healing, when compared with wild-type cells in ALG. A first-generation adenoviral vector (Ad) was used to deliver human BMP2 cDNA (AdBMP2) to BMDMSC from Lewis rats (from Tulane Center for Gene Therapy). Articular osteotomies were created in nude rats and treated with BMDMSC, either wild-type(NoAd) or transduced with AdBMP2 or Ad-luciferase reporter gene construct (AdLuc), suspended in 50 |[mu]|l of 1.2% ALG. Controls were empty ALG and untreated osteotomies. Differentiation of BMDMSC in vitro was monitored in ALG constructs using real- time RT-PCR to document changes in gene expression of aggrecan, type II collagen, type I collagen, and BMP2. Luciferase expression was monitored using an in vivo imaging system. Healing was compared using quantitative micro-computed tomography (micro-CT), fluorescent labeling, and histology at post-operative day 14. Upregulation of aggrecan, type II collagen, type I collagen, and BMP2 gene expression were confirmed in BMDMSC transduced with AdBMP2 and suspended in ALG (AdBMP2xBMDMSC/ALG). Osteotomy gap area (mm2) was greater (p < 0.01) in the AdBMP2xBMDMSC/ALG group (Fig. 1) when compared with untreated osteotomies (Fig. 2). In all ALG groups, but not in untreated osteotomies, bone healing was impeded by development of a cartilage mass. Untreated osteotomy gaps filled with fibrous tissue and bone. While this was an unexpected finding, a three- dimensional alginate matrix prevented healing of bone and cartilage. Further study is warranted, particularly in immunocompetent animal models, to evaluate other delivery methods for genetically modified BMDMSC as treatments for complex articular fractures.