A novel tissue engineering for bone formation has been proposed, to make osteoblast differentiation balanced by transfecting the mesenchymal stem cells with a gene encoding human bone morphogenetic protein-2 (hBMP-2) under the control of adipocyte specific lipoprotein lipase (LPL) promoter. Due to the promoter specificity, the initiation of BMP transcription is dependent on adipogenesis. For 14-day culture in the presence of ascorbic acid (asc) and beta-glycerophosphate (gly), nontransfected mouse embryonic fibroblast C3H10T1/2 (10T1/2) cells showed extensive accumulation of lipid droplets and adipocyte specific enzyme glycerol-3-phosphate dehydrogenase (G3PDH) mRNA expression, but exhibited neither BMP-2 expression, high alkaline phosphatase (ALP) activity which reflects osteoblast phenotype. On the other hand, transfected 10T1/2 cells showed hBMP-2 expression, high ALP activity and low level of G3PDH. mRNA expression accompanied with minimal lipid droplets. These results indicate that 10T1/2 cells are proved to be differentiated with maintaining coordinated balance of adipogenesis and osteogenesis, when they are transfected by the gene encoding hBMP-2 under the control of LPL promoter.