Recombinant human bone morphogenetic protein-2 and -7 were recently granted United States Food and Drug Administration approval for select clinical applications in bone repair. While significant progress has been made in the delivery of recombinant osteogenic factor to promote bone healing, the short half-life and instability of the protein requires the delivery of milligram quantities of factor or multiple dosages. The potential of gene therapy for bone regeneration is the delivery of physiological levels of therapeutic protein using natural cellular mechanisms. Experimental investigations have demonstrated this approach uses lower dosages of factor to yield bone healing equivalent to that achieved via the administration of recombinant factor or use of bone grafts. The current states of gene delivery for bone tissue engineering applications and challenges to be met are presented in this review. Over the past couple of years, studies have continued to examine the delivery of the osteogenic factor bone morphogenetic protein using gene therapies. The importance of angiogenesis to bone formation has prompted the development of vascular endothelial growth factor gene expression systems for bone regeneration. Viral vectors, in combination with allograft bone, have been investigated to improve existing surgical care. Newly constructed vectors with reduced immunogenicity and regulated gene expression systems provide a greater degree of control over the timing and level of gene expression. Several advances have allowed bone tissue engineering by gene delivery to advance beyond serving as a potential treatment for isolated bone defects and fractures to a gene therapy approach for the treatment of genetic based bone diseases, such as osteogenesis imperfecta.