Calcitonin gene-related peptide (CGRP) promotes osteoblast recruitment and osteogenic activity. However, no evidence suggests that CGRP could affect the differentiation of stem cells toward osteoblasts. In this study, we genetically modified adipose-derived stem cells (ADSCs) by introducing the CGRP gene through adenoviral vector transduction and investigated on cellular proliferation and osteoblast differentiation in vitro and osteogenesis in vivo as well. For the in vitro analyses, rat ADSCs were transducted with adenoviral vectors containing the CGRP gene (Ad-CGRP) and were cultured in complete osteoblastic medium. The morphology, proliferative capacity, and formation of localized regions of mineralization in the cells were evaluated. The expression of alkaline phosphatase (ALP) and special markers of osteoblasts, such as Collagen I, Osteocalcin (BPG) and Osteopontin (OPN), were measured by cytochemistry, MMT, RT-PCR, and Western blot. For the in vivo analyses, the Ad-CGRP-ADSCs/Beta-tricalcium phosphate (beta-TCP) constructs were implanted in rat radial bone defects for 12 weeks. Radiography and histomorphology evaluations were carried out on 4 weeks and 12 weeks. Our analyses indicated that heterogeneous spindle-shaped cells and localized regions of mineralization were formed in the CGRP-transduced ADSCs (the transduced group). A higher level of cellular proliferation, a high expression level of ALP on days 7 and 14 (p<0.05), and increased expression levels of Collagen I, BPG and OPN presented in transduced group (p<0.05). The efficiency of new bone formation was dramatically enhanced in vivo in Ad-CGRP-ADSCs/beta-TCP group but not in beta-TCP group and ADSCs/beta-TCP group. Our results reveal that ADSCs transduced with an Ad-CGRP vector have stronger potential to differentiate into osteoblasts in vitro and are able to regenerate a promising new tissue engineering bone in vivo. Our findings suggest that CGRP-transduced ADSCs may serve as seed cells for bone tissue engineering and provide a potential way for treating bone defects.