Over 800,000 bone grafting procedures are performed in the United States annually, creating a demand for viable alternatives to autogenous bone, the grafting standard in osseous repair. The objective of this study was to examine the efficacy of a BMP-polymer matrix in inducing the expression of the osteoblastic phenotype and in vitro bone formation by muscle-derived cells. Specifically, we evaluated the ability of bone morphogenetic protein-7 (BMP-7), delivered from a poly (lactide-co-glycolide) (PLAGA) matrix, to induce the differentiation of cells derived from rabbit skeletal muscle into osteoblast-like cells and subsequently form mineralized tissue. Results confirmed that muscle-derived cells attached and proliferated on the PLAGA substrates. BMP-7 released from PLAGA induced the muscle-derived cells to increase bone marker expression and form mineralized cultures. These results demonstrate the efficacy of a BMP-polymer matrix in inducing the expression of the osteoblastic phenotype by muscle-derived cells and present a new paradigm for bone tissue engineering. (C) 2003 Elsevier Science (USA). All rights reserved.