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Bone morphogenetic proteins (BMPs) play a sentinel role in osteoblastic differentiation, and their implementation into clinical practice can revolutionize cranial reconstruction. Preliminary data suggest a therapeutic role of adenoviral gene delivery of BMPs in murine calvarial defect healing. Poor transgene expression inherent in direct adenoviral therapy prompted investigation of cell-based strategies.To isolate and immortalize calvarial cells as a potential progenitor source for osseous tissue engineering.Cells were isolated from murine skulls, cultured, and transduced with a retroviral vector bearing the loxP-flanked SV40 large T antigen. Immortalized calvarial cells (iCALs) were evaluated via light microscopy, immunohistochemistry, and flow cytometry to determine whether the immortalization process altered cell morphology or progenitor cell profile. Immortalized calvarial cells were then infected with adenoviral vectors encoding BMP-2 or GFP and assessed for early and late stages of osteogenic differentiation.Immortalization of calvarial cells did not alter cell morphology as demonstrated by phase contrast microscopy. Mesenchymal progenitor cell markers CD166, CD73, CD44, and CD105 were detected at varying levels in both primary cells and iCALs. Significant elevations in alkaline phosphatase activity, osteocalcin mRNA transcription, and matrix mineralization were detected in BMP-2 treated iCALs compared with GFP-treated cells. Gross and histological analyses revealed ectopic bone production from treated cells compared with controls in an in vivo stem cell implantation assay.We have established an immortalized osteoprogenitor cell line from juvenile calvarial cells that retain a progenitor cell phenotype and can successfully undergo osteogenic differentiation upon BMP-2 stimulation. These cells provide a valuable platform to investigate the molecular mechanisms underlying intramembranous bone formation and to screen for factors/small molecules that can facilitate the healing of osseous defects in the craniofacial skeleton.