We investigated the effects of recombinant human BMP-2 (rhBMP-2) on differentiation of cells isolated from human bone, muscle, and skin. Cells isolated from bones of six patients (HBM-1 to HBM-6), muscle from five patients (HM-1 to HM-5), and skin from three patients (HF-1 to HF-3) were used. rhBMP-2 had no effects on proliferation of two HBM cells, but had a stimulatory effect on three HM cell samples. rhBMP-2 stimulated both alkaline phosphatase (ALP) activity in all HBM cells and parathyroid hormone (PTH)-dependent cAMP production in three of the four HBM cell samples, although the magnitudes of these stimulatory effects differed among the cells tested. Although none of the HBM cells examined produced detectable amounts of osteocalcin in the absence of 1,25-(OH)2vitamin D3, they synthesized measurable amounts of osteocalcin in its presence. rhBMP-2 inhibited 1,25-(OH)2vitamin D3-dependent osteocalcin production in all of the HBM cell samples. Transplantation of HBM-6 cells with rhBMP-2 using diffusion chambers into the peritoneal cavity of athymic mice induced formation of cartilage and bone in the diffusion chambers, but neither cartilage nor bone was formed in chambers transplanted without rhBMP-2. rhBMP-2 also stimulated ALP activity in all of the HM and HF cell samples examined and PTH-dependent cAMP production in three of four HM cell samples. rhBMP-2 induced no osteocalcin production in any of the HM or HF cells in the presence of 1,25-(OH)2vitamin D3. rhBMP-2 markedly inhibited myotube formation by all of the HM cell samples. Transplantation of HM-4 cells with rhBMP-2, using diffusion chambers, into athymic mice induced ALP-positive cells in the chambers, but neither cartilage nor bone was observed. These results suggest that rhBMP-2 is a potent stimulator of osteoblast differentiation and bone formation in human cells.