Most recombinant human bone morphogenetic protein (rhBMP) is currently obtained from Chinese hamster ovary (CHO) cells. If rhBMP with more activity could be derived from Escherichia coli (E. coli), a large quantity of rhBMP could be produced at low cost. The bone-inducing ability of an E. coli -derived rhBMP-2 (ErhBMP-2) variant with an N-terminal sequence was examined and compared with CHO cell-derived rhBMP-2 (CrhBMP-2). Two, 10, or 50 microgram of ErhBMP-2 or CrhBMP-2 was mixed with 3mg of atelopeptide type I collagen as the carrier, and specimens were implanted into the calf muscle pouches of Wistar rats (n= 5 in each group). Three weeks later, new bone had formed in all the ErhBMP-2-implanted and CrhBMP-2-implanted muscles. Radiographic and histological examinations showed that the bone induced by ErhBMP-2 had a large hollow bone matrix with more fatty marrow than the bone induced by CrhBMP-2. Quantitative analysis indicated that the activity of ErhBMP-2 was similar to that of CrhBMP-2, so ErhBMP-2 may be useful for inducing bone formation.