Bone morphogenetic proteins (BMPs) are actively involved in ossification, and BMP-2 participates throughout the entire process. Gene therapy for bone regeneration using adenovirus-expressing BMPs has been successful in small mammals, but it has not been satisfactory in large mammals. We generated a 3-component implant (3C graft) comprising autologous mesenchymal stem cells (MSCs), ex vivo transduced with an adenovirus vector-expressing BMP-2 and embedded in a demineralized human bone matrix (DBM). In vitro studies demonstrated vector-induced osteogenesis; osteoblast population and mineralization of the extracellular matrix were greater in the vector-transduced cultures than in the controls (nontransduced MSCs stimulated with osteogenic media were used as positive controls, and nontransduced MSCs served as a negative control). The 3-component grafts were used to fill osteotomies created by bone distraction surgery in mongrel dogs. Control groups comprised dogs with bone distraction alone and dogs with nontransduced MSC grafts. The radiography follow-up, performed 10 weeks after distraction, demonstrated a remarkable reduction in the consolidation period compared with controls. Postmortem mandibles submitted for anatomic and histologic analyses showed improved remodeling and bone maturation in the 3C-grafted dogs. Inflammatory infiltrates were not observed in any of the treated areas, and no liver toxicity was detected. We demonstrated acceleration of osteogenesis in a dog model for bone distraction by using an implant of BMP-2 modified MSCs. These results are helpful for future clinical trials of mandible bone distraction.