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We previously developed a novel method for gene transfer, which combined a non-viral gene expression vector with transcutaneous in vivo electroporation. We applied this method to transfer the bone morphogenetic protein (BMP) gene and induce ectopic bone formation in rat skeletal muscles. At present, it remains unclear which types of cells can differentiate into osteogenic cells after BMP gene transfer by in vivo electroporation. Two types of stem cells in skeletal muscle can differentiate into osteogenic cells: muscle-derived stem cells, and bone marrow-derived stem cells in the blood. In the present study, we transferred the BMP gene into rat skeletal muscles. We then stained tissues for several muscle-derived stem cell markers (e.g., Pax7, M-cadherin), muscle regeneration-related markers (e.g., Myod1, myogenin), and an inflammatory cell marker (CD68) to follow cell differentiation over time. Our results indicate that, in the absence of BMP, the cell population undergoes muscle regeneration, whereas in its presence, it can differentiate into osteogenic cells. Commitment towards either muscle regeneration or induction of ectopic bone formation appears to occur five to seven days after BMP gene transfer.