We investigated the implications of induced osteogenic differentiation on gene delivery in multipotent rat marrow stromal cells (MSCs). Prior to genetic manipulation cells were cultured with or without osteogenic supplements (5x10(-8) M dexamethasone, 160 microM l-ascorbic acid 2-phosphate, and 10 mM beta-glycerophosphate). Comparison of liposome, retroviral, and adenoviral vectors demonstrated that all three vectors could mediate gene delivery to primary rat MSCs. When these vectors were applied in the absence or presence of osteogenic supplements, we found that MSCs differentiated prior to transduction with adenovirus type 5 vectors produced a 300% increase in transgene expression compared to MSCs that were not exposed to osteogenic supplements. This differentiation effect appeared specific to adenoviral mediated gene delivery, since there was minimal increase in retroviral gene delivery and no increase in liposome gene delivery when MSCs were treated with osteogenic supplements. In addition, we also determined this increase in transgene production to occur at a higher concentration of dexamethasone (5x10(-8) M) in the culture medium of MSCs prior to adenoviral transduction. We found that this increased transgene production could be extended to the osteogenic protein, human bone morphogenetic protein 2 (hBMP-2). When delivered by an adenoviral vector, hBMP-2 transgene production could be increased from 1.4 ng/10(5) cells/3 days to 4.3 ng/10(5) cells/3 days by culture of MSCs with osteogenic supplements prior to transduction. These results indicate that the utility of MSCs as a therapeutic protein delivery mechanism through genetic manipulation can be enhanced by pre-culture of these cells with dexamethasone.