Transplantation of gene-modified mesenchymal stem cells (MSCs) in animals for bone regeneration therapy has been evaluated extensively in recent years. However, increased endosteal bone formation by intravenous injection of MSCs ectopically expressing a foreign gene has not yet been shown. Aside from the clearance by lung and other tissues, the surface compositions of MSCs may not favor their bone marrow (BM) migration and engraftment. To overcome these hurdles, a gene encoding the chemokine receptor largely responsible for stromal-derived factor-1 (SDF-1)-mediated BM homing and engraftment of hematopoietic stem cells (HSCs), CXCR4, was transduced into mouse C3H10T1/2 cells by adenovirus infection. A dose-dependent increase of CXCR4 surface expression with a parallel enhanced chemotaxis toward SDF-1 in these cells after virus infection was clearly observed. Higher BM retention and homing of CXCR4-expressing MSCs were also found after they were transplanted by intramedullary and tail vein injections, respectively, into immunocompetent C3H/HeN mice. Interestingly, a full recovery of bone mass and a partial restoration of bone formation in glucocorticoid-induced osteoporotic mice were observed 4 wk after a single intravenous infusion of one million CXCR4-expressing C3H10T1/2 cells. In the meantime, complete recovery of bone stiffness and strength in these animals was consistently detected only after a systemic transplantation of CXCR4 and Cbfa-1 co-transduced MSCs. To our knowledge, this is the first report to show unequivocally the feasibility of ameliorating glucocorticoid-induced osteoporosis by systemic transplantation of genetically manipulated MSCs.