The efficacy of osteogenic protein-1 (OP-1; BMP-7) in regeneration of articular cartilage was examined by creating knee chondral defects in sheep. With a specially designed instrument in both knees, two 10 mm (diameter) chondral defects were created: one in the trochlea and the other on the femoral condyle. The recombinant BMP was delivered via an extra-articulary positioned mini-osmotic pump, which was fixed to the femoral diaphysis above the knee joint, and connected by a polyethylene tubing to the articular space. Prior to use, the compatibility of OP-1 with mini-osmotic pumps was tested in vitro by measuring aggregation/precipitation and modification of the released protein by size exclusion and reversed phase HPLC. The average amount of aggregation was 15% and about 5% of OP-1 was modified. However, the biological activity of OP-1 released from pumps over a period of 2 weeks at 37 degrees C was equal to ROS cell assay OP-1 standard. Following surgery, a total of 55 microg (low dose) or 170 microg (high dose) OP-1 in acetate buffer (pH 4.5) was slowly released from the pump over a period of 2 weeks. The pumps connected to control knees were filled with acetate buffer as a vehicle. Twelve animals were operated, six of which were treated with the low OP-1 dose, and six with the high OP-1 dose. Three sheep of each group were killed either at 3 or 6 months following surgery, based on arthroscopical evaluation. The chondral defects in the control knees remained empty during the observation period. At 3 months following surgery, defects treated with both OP-1 doses were filled with connective tissue and cartilage. At 6 months following surgery, both doses of OP-1 stimulated regeneration in treated knees. The boundaries between new and old cartilage were well fused and mechanically resisted animals' weight bearing. The regenerated cartilage was rich in proteoglycans and type II collagen, as demonstrated by toluidine blue staining and immunohistochemistry. No signs of endochondral bone formation above the bony tidemark were observed. We suggest that a recombinant bone morphogenctic protein stimulates ingrowth of mesenchymal cells into the chondral defects which then transform into newly formed articular cartilage-like tissue.