Previous studies have demonstrated that bone morphogenetic protein-4 (BMP4) could participate in vivo endochondral ossification and is one of the main local contributing factors in the early stage of fracture healing. To investigate the effectiveness of BMP4 gene transfer, we constructed an adenoviral vector, Ad-BMP4, and evaluated its osteoinduction activity both in vitro and in vivo. In vitro study suggested that this vector could efficiently transduce mouse myoblast C2C12 cells and produce osteogenic BMP4 protein, as confirmed by immunofluorescence analysis and alkaline phosphatase activity assay. For in vivo study, Ad-BMP4 was directly injected into the hind limb muscles of male athymic nude rats. Visible new bone formation under X-ray films could be detected as early as three weeks post-injection. The bone tissue was further analyzed by histological staining and revealed a typical remodeled bone structure. In conclusion, this study is the first to establish the feasibility of adenovirus-based BMP4 gene therapy for bone regeneration.