We sought to establish whether fibroblasts transfected ex vivo could be delivered via gelfoam impregnated with a solution of transfected cells to achieve local transgene expression in a fracture site. A 10 millimeter segmental bone defect was created after 12 mm periosteal excision and plated in the middle one third of each rabbit tibia. Dermal tissues were obtained and fibroblasts were cultured with DMEM. Fibroblasts were labeled with CMTMR and 5x106 labeled fibroblasts in 1ml PBS with 1x1 cm? Impregnated gelfoam was placed into the fracture gap (n=2). Twenty four hours after cell injection, the rabbits were killed and specimens were harvested from the fractured leg. Using SuperFect (Qiagen Inc), the primary fibroblasts were transfected with pcDNA-VEGF which was generated with the full length coding sequence of the human VEGF gene. A convenient reporter gene, Efficiency Green Fluorescent Protein (EGFP), was used for monitoring transfection of VEGF by fluorescence intensity. Experimental rabbits received 5.0 X 106 VEGF transfected cells in 1 ml PBS via gelfoam at the fracture sites. The animals were sacrificed at seven days (n=4), fourteen days (n=4) and twenty-one days (n=4) post surgery and the fracture site specimens were collected for analysis. The fluorescently labeled cells with CMTMR were found at the fracture site and surrounding tissues. It was demonstrated that the labeled cells were delivered into the fracture gap, bone marrow and muscle surrounding a segmental defect in the rabbit. In the VEGF group, visualised VEGF immunostaining (brown) was shown in the fracture site around the Gelfoam; as well VEGF was distributed at sites of endochondral ossification. Visible bone formation was shown: VEGF promoted new bone formation by VonKossa staining (dark) and produced numerous vessels by CD31 positive staining (brownish black). The VEGF protein was detected in and around the fracture by ELISA. This data encourages the further development of genetic approaches using cell based VEGF gene transfer without viral vectors to promote fracture healing.