Efficient osteogenetic differentiation and bone formation from muscle-derived stem cells (MDSCs) should have potential clinical applications in treating nonunion fracture healing or bone defects. Here, we investigate osteogenetic differentiation ability of MDSCs induced by bone morphogenetic protein 9 (BMP9) in vitro and bone formation ability in rabbit radius defects repairing model. Rabbit's MDSCs were extracted by type I collagenase and trypsin methods, and BMP9 was introduced into MDSCs by infection with recombinant adenovirus. Effects of BMP9-induced osteogenetic differentiation of MDSCs were identified with alkaline phosphatase (ALP) activity and expression of later marker. In stem-cell implantation assay, MDSCs have also shown valuable potential bone formation ability induced by BMP9 in rabbit radius defects repairing test. Taken together, our findings suggest that MDSCs are potentiated osteogenetic stem cells which can be induced by BMP9 to treat large segmental bone defects, nonunion fracture, and/or osteoporotic fracture.