Local gene transfer of the human Lim mineralization protein (LMP), a novel intracellular positive regulator of the osteoblast differentiation program, can induce efficient bone formation in rodents. To develop a clinically relevant gene therapy approach to facilitate bone healing, we have used primary dermal fibroblasts transduced ex vivo with Ad.LMP-3 and seeded on a hydroxyapatite/collagen matrix prior to autologous implantation. Here, we demonstrate that genetically modified autologous dermal fibroblasts expressing Ad.LMP-3 are able to induce ectopic bone formation following implantation of the matrix into mouse triceps and paravertebral muscles. Moreover, implantation of the Ad.LMP-3-modified dermal fibroblasts into a rat mandibular bone critical size defect model results in efficient healing, as determined by X-rays, histology and three-dimensional microcomputed tomography (3DmuCT). These results demonstrate the effectiveness of the non-secreted intracellular osteogenic factor LMP-3 in inducing bone formation in vivo. Moreover, the utilization of autologous dermal fibroblasts implanted on a biomaterial represents a promising approach for possible future clinical applications aimed at inducing new bone formation.