Common cell based strategies for treating bone defects require time-consuming and expensive isolation and expansion of autologous cells. We developed a novel expedited technology creating gene activated muscle grafts. We hypothesized that BMP-2 activated muscle grafts provide healing capabilities comparable to autologous bone grafting, the clinical gold standard. Two male, syngeneic Fischer 344 rats served as tissue donors. Muscle tissue was harvested from hind limbs and incubated with an adenoviral vector carrying the cDNA encoding BMP-2. Bone tissue was harvested from the iliac crest. Segmental bone defects were created in the right femora of 12 rats and were filled with either BMP-2 activated muscle tissue or bone grafts. After 8 weeks, femora were evaluated by radiographs, microCT, and biomechanical tests. BMP-2 activated muscle grafts and autologous bone grafts resulted in complete mineralization and healing, as documented by radiographs and microCT. Bone volume in the muscle graft defects (33+/-12mm3) was similar to autologous bone graft defects (39+/-5mm3). Torque at failure of the two groups was statistically indistinguishable (240+/-115 Nmm vs. 232+/-108Nmm). In previous experiments we demonstrated that the large segmental defect model in this study will not heal with either empty defects or non-activated muscle grafts. Our findings therefore demonstrate that BMP-2 gene activation of muscle tissue effectively stimulates defect healing similar to autologous bone grafts