Many clinical conditions require the stimulation of bone growth. The use of recombinant bone morphogenetic proteins does not provide a satisfying solution to these conditions due to delivery problems and high cost. Gene therapy has emerged as a very promising approach for bone repair that overcomes limitations of protein-based therapy. Several preclinical studies have shown that gene transfer technology has the ability to deliver osteogenic molecules to precise anatomical locations at therapeutic levels for sustained periods of time. Both in-vivo and ex-vivo transduction of cells can induce bone formation at ectopic and orthotopic sites. Genetic engineering of adult stem cells from various sources with osteogenic genes has led to enhanced fracture repair, spinal fusion and rapid healing of bone defects in animal models. This review describes current viral and non-viral gene therapy strategies for bone tissue engineering and repair including recent work from the author's laboratory. In addition, the article discusses the potential of gene-enhanced tissue engineering to enter widespread clinical use.