A novel gene therapy approach for treating damaged cartilage is proposed that involves placing endotoxin-free cDNA containing the gene for bone morphogenetic protein-2 (BMP-2) in type I collagen sponges and then transferring the naked plasmid DNA construct to the injury site. A fullthickness cartilaginous defect in rabbits implanted with plasmid containing a marker gene (β-galactosidase) showed expressed protein as detected by immunostaining. At 1 week postimplantation, mesenchymal cells subjacent to the defect had incorporated the implanted naked plasmid DNA and, once transfected, served as local bioreactors, transiently producing the gene product. Plasmids containing the gene for BMP-2 implanted in collagen sponges in cartilage lesions stimulated hyalinelike articular cartilage repair at 12 weeks postimplantation, nearly equivalent in quality to that induced by collagen sponges with recombinant BMP-2 protein. Our approach circumvents the risks of inflammation and immunogenic response associated with the use of viral vectors. Naked plasmid DNA as a vehicle for transferring therapeutic genes has been shown to be effective in a therapeutic model within rabbit articular cartilage and appears to be safe and cost effective.