LIM mineralization protein-1 (LMP-1) is a novel intracellular osteogenic factor associated with bone development that has been implicated in the bone morphogenetic protein (BMP) pathway. This preliminary study evaluated the possibility of LMP-1-based retroviral gene therapy to stimulate osteoblast differentiation in vitro and fracture repair in vivo. A Moloney leukemia virus (MLV)-based retroviral vector to express LMP-1 with a hemagglutinin (HA) tag was developed, and its effects were evaluated on MC3T3-E1 cell differentiation and in the rat femur fracture model. MC3T3-E1 osteoblasts transduced with the MLV-HA-LMP-1 vector demonstrated significantly increased osteoblast marker gene expression (P < 0.05) and mineral deposition compared to control transduced cells. Femoral midshaft fractures were produced in Fischer 344 rats by the three-point bending technique. The MLV-HA-LMP-1 or control vector was applied at the fracture site through percutaneous injections 1 day postfracture. Analysis of fracture healing of 10 MLV-HA-LMP-1-treated and 10 control MLV-beta-galactosidase (beta-gal)-treated animals was completed at 3 weeks by X-ray, peripheral quantitative computed tomography, and histology. MLV-HA-LMP-1-treated animals had 63% more bone mineral content at the fracture site (P < 0.01), 34% greater total hard callus area (P < 0.05), and 45% less cartilage in the fracture callus (P < 0.05) compared to MLV-beta-gal-treated animals. There was no effect of LMP-1 treatment on the density of the hard callus. Immunohistochemistry revealed expression of the LMP-1 transgene in the fracture callus at 21 days postfracture. Immunohistochemistry also revealed that LMP-1 transgene expression did not result in an increase in BMP-4 expression in the fracture callus. Compared to MLV-BMP-4 gene therapy studies, MLV-HA-LMP-1 gene therapy improved bony union of the fracture gap to a greater extent and did not cause heterotopic bone formation. This suggests that LMP-1 may be a better potential candidate for gene therapy for fracture repair than BMP-4. These exciting, albeit preliminary, findings indicate that LMP-1-based gene therapy may potentially be a simple and effective means to enhance fracture repair that warrants further investigation.