Osteoporosis, a major public health burden, is associated with increased fracture risk. Fracture healing in osteoporosis is delayed, with reduced callus formation and impaired biomechanical properties of newly formed bone leading to high risk of fixation failure. Adenoviral gene transfer of bone morphogenetic protein-2 (BMP-2) has been shown to enhance fracture healing. This study evaluated the ability of gene transfer to enhance bone healing in osteoporosis. An established sheep model of osteoporosis with well-characterized alterations in fracture healing was used. Osteotomies were created surgically in the tibias of adult female sheep and monitored for 8 weeks, using radiographic, biomechanical, and histological methods. For pilot experiments, primary ovine osteoblasts and mesenchymal stem cells were transduced with a recombinant adenovirus carrying BMP-2 cDNA (Ad.BMP-2). Large increases in alkaline phosphatase production and mineralization confirmed the ability of human BMP-2 to stimulate osteoblastic differentiation in sheep. In vivo bending stiffness measurements during fracture healing as well as ex vivo torsional stiffness measurements demonstrated stiffer callus tissue after treatment with Ad.BMP-2. The differences were found mainly in the early fracture-healing period. Computed tomography demonstrated that animals receiving the BMP-2 cDNA had larger cross-sectional callus area and higher callus density. Histological examination of the tibias confirmed enhanced callus formation. Direct, local adenoviral delivery of an osteogenic gene thus led to enhanced healing of fractures in an ovine model of osteoporosis. These promising data encourage the further development of genetic approaches to enhance bone healing in patients suffering osteoporosis-associated fractures.