Adult stem cells have therapeutic potential because of their intrinsic capacity for self-renewal, especially for bone regeneration. The present study shows the utility of ex vivo modified mesenchymal stem cells (MSC) to enhance bone density in an immunocompetent mouse model of osteopenia. MSC were transduced ex vivo with a recombinant adeno-associated virus 2 (rAAV2) expressing bone morphogenetic protein 2 (BMP2) under the transcriptional control of collagen type-1α promoter. To enrich bone homing in vivo, we further modified the cells to transiently express the mouse α4 integrin. The modified MSC were systemically administered to ovariectomized, female C57BL/6 mice. Effects of the therapy were determined by dual-energy X-ray absorptiometry, 3D micro-CT, histology and immunohistochemistry for up to 6 months. Results indicated that mice transplanted with MSC expressing BMP2 showed significant increase in bone mineral density and bone mineral content (P<0.001) with relatively better proliferative capabilities of bone marrow stromal cells and higher osteocompetent pool of cells compared to control animals. Micro-CT analysis of femora and other bone histomorphometric analyses indicated more trabecular bone following MSC-BMP2 therapy. Results obtained by transplanting genetically modified MSC from green fluorescent protein transgenic mouse suggested that production of BMP2 from transplanted MSC also influenced the mobilization of endogenous progenitors for new bone formation. © 2010 Macmillan Publishers Limited All rights reserved.