Baculovirus is an emerging gene delivery vector, thanks to a number of unique advantages. Herein, we genetically modified the rabbit articular chondrocytes with a recombinant baculovirus (Bac-CB) encoding bone morphogenetic protein-2 (BMP-2), which conferred high level BMP-2 expression and triggered the re-differentiation of dedifferentiated third passage (P3) chondrocytes in the monolayer culture. The transduced and mock-transduced P3 cells were seeded into porous scaffolds and cultured in either the dishes or the rotating-shaft bioreactor (RSB), a novel bioreactor imparting a dynamic, two-phase culture environment. Neither mocktransduced constructs in the RSB culture nor the Bac-CBtransduced constructs in the static culture grew into uniform cartilaginous tissues. Only the Bac-CB-transduced constructs cultured in the RSB for 3 weeks resulted in cartilaginous tissues with hyaline appearance, uniform cell distribution, cartilage-specific gene expression and considerably enhanced cartilage-specific extracellular matrix deposition, as determined by histological staining, reverse transcription-PCR analyses and biochemical assays. This is the first study demonstrating that combination of baculovirusmediated growth factor expression and RSB culture synergistically enhanced in vitro creation of cartilaginous tissues from dedifferentiated chondrocytes. Since baculovirus transduction is generally considered safe, this approach represents a viable alternative to stimulate the formation of engineered cartilage in a more cost-effective way than the growth factor supplementation.