Degradable matrices containing expression plasmid DNA [gene-activated matrices (GAMs)] were implanted into segmental gaps created in the adult rat femur. Implantation of GAMs containing beta-galactosidase or luciferase plasmids led to DNA uptake and functional enzyme expression by repair cells (granulation tissue) growing into the gap. Implantation of a GAM containing either a bone morphogenetic protein-4 plasmid or a plasmid coding for a fragment of parathyroid hormone (amino acids 1-34) resulted in a biological response of new bone filling the gap. Finally, implantation of a two-plasmid GAM encoding bone morphogenetic protein-4 and the parathyroid hormone fragment, which act synergistically in vitro, caused new bone to form faster than with either factor alone. These studies demonstrate for the first time that repair cells (fibroblasts) in bone can be genetically manipulated in vivo. While serving as a useful tool to study the biology of repair fibroblasts and the wound healing response, the GAM technology may also have wide therapeutic utility.