Growth and differentiation factor-5 (GDF-5) is a divergent member of the transforming growth factor-beta/bone morphogenetic protein (BMP) superfamily that is required for proper skeletal patterning and development in the vertebrate limb. Based on the homology of GDF-5 with other bone-inducing BMP family members, the inductive activity of a recombinant form of human GDF-5 (rhGDF-5) was evaluated in a series of in vitro assays and in vivo bone-formation models. The in vitro response to rhGDF-5 resulted in the formation of chondrogenic nodules in fetal rat calvarial cells cultured in the context of collagen or collagen/hyaluronate extracellular matrices. Matrices loaded with rhGDF-5 induced ectopic cartilaginous and osseous tissue when implanted in subcutaneous or intramuscular sites. In non-human primate long-bone-defect and spinal-fusion models, rhGDF-5 combined with a mineralized collagen matrix induced bone formation in a manner equivalent to autogenous bone. These results highlight the unique potential of rhGDF-5 in a wide variety of orthopaedic applications.