The goal of this study is to provide a safe effective system for inducing bone formation for fracture healing in situations of significant trauma. This set of proposed experiments will provide significant knowledge to the field of bone tissue engineering. Proposed studies will provide essential biological information and involves the development of a novel biomaterial that can safely house the cells expressing the bone inductive factor to produce the new bone at which time the material is then selectively eliminated. Ultimately this system has significant applicability. Often bone graft must be surgically removed from the pelvis, to implant into the site of difficult fractures for proper healing. This additional surgery often results in significant pain, and long term healing. Further, this system would be applicable to orthopedic trauma situations that previously resulted in amputation. We propose in these studies to complete the development of this bone induction system and test it in a preclinical animal model. Validation of our hypothesis will provide a safe and efficacious material for the production of bone leading to reliable fracture healing, circumventing the need for bone grafts, or for direct administration of cells, viruses, or other materials that could lead to significant adverse reactions.