Efficacious bone regeneration could revolutionize the clinical management of many bone and musculoskeletal disorders. Bone has the unique ability to regenerate and continuously remodel itself throughout life. However, clinical situations arise when bone is unable to heal itself, as with segmental bone loss, fracture non-union, and failed spinal fusion. This leads to significant morbidity and mortality. Current attempts at improved bone healing have been met with limited success, fueling the development of improved techniques. Gene therapy in many ways represents an ideal approach for augmenting bone regeneration. Gene therapy allows specific gene products to be delivered to a precise anatomic location. In addition, the level of transgene expression as well as the duration of expression can be regulated with current techniques. For bone regeneration, the gene of interest should be delivered to the fracture site, expressed at appropriate levels, and then deactivated once the fracture has healed. Delivery of biological factors, mostly bone morphogenetic proteins (BMPs), has yielded promising results both in animal and clinical studies. There has also been tremendous work on discovering new growth factors and exploring previously defined ones. Finally, significant advances are being made in the delivery systems of the genes, ranging from viral and non-viral vectors to tissue engineering scaffolds. Despite some public hesitation to gene therapy, its use has great potential to expand our ability to treat a variety of human bone and musculoskeletal disorders. It is conceivable that in the near future gene therapy can be utilized to induce bone formation in virtually any region of the body in a minimally invasive manner. As bone biology and gene therapy research progresses, the goal of successful human gene transfer for augmentation of bone regeneration draws nearer.