In the field of bone regeneration, BMP-2 is considered one of the most important growth factors because of its strong osteogenic activity, and is therefore extensively used in clinical practice. However, the short half-life of BMP-2 protein necessitates the use of supraphysiological doses, leading to severe side-effects. This study investigated the efficiency of bone formation at ectopic and orthotopic sites as a result of a low-cost, prolonged presence of BMP-2 in a large animal model. Constructs consisting of alginate hydrogel and BMP-2 cDNA, together acting as a non-viral gene-activated matrix, were combined with goat multipotent stromal cells (gMSCs) and implanted in spinal cassettes or, together with ceramic granules, intramuscularly in goats, both for 16 weeks. Bone formation occurred in all cell-seeded ectopic constructs, but the constructs containing both gMSCs and BMP-2 plasmid DNA showed higher collagen I and bone levels, indicating an osteogenic effect of the BMP-2 plasmid DNA. This was not seen in unseeded constructs, even though transfected, BMP-2-producing cells were detected in all constructs containing plasmid DNA. Orthotopic constructs showed mainly bone formation in the unseeded groups. Besides bone, calcified alginate was present in these groups, acting as a surface for new bone formation. In conclusion, transfection of seeded or resident cells from this DNA delivery system led to stable expression of BMP-2 during 16 weeks, and promoted osteogenic differentiation and subsequent bone formation in cell-seeded constructs at an ectopic location and in cell-free constructs at an orthotopic location in a large animal model. Copyright © 2012 John Wiley & Sons, Ltd.