We have tested the feasibility of muscle-based gene therapy and tissue engineering for urological dysfunction using highly purified muscle-derived cells (MDC) that display stem cell characteristics. We then explored the potential use of these MDC as an alternative therapy for the treatment of impaired detrusor contractility. The MDC were genetically engineered to express the gene encoding beta-galactosidase and injected into the bladder walls of SCID mice. The injected bladders were harvested at various time-points after injection and assayed for beta-galactosidase activity; the presence of myofibers within the injected tissue was determined by detection of fast myosin heavy chain isoform (MyHCs). We have demonstrated that the injected MDC are capable of not only surviving in the lower urinary tract, but also improving the contractility of the bladder following an induced injury. Two potential mechanisms can be used to explain this finding. First, we have observed that some of the beta-galactosidase-expressing cells expressed alpha-smooth muscle actin, suggesting a differentiation into smooth muscle. Second, a stain for acetylcholine receptors (AChRs), which identifies the location of neuromuscular junctions, revealed that the myofibers derived from the doner cells became innervated into the bladder as early as 2 weeks after injection. These results suggest that gene therapy and tissue engineering based on MDC potentially can be used for urological dysfunction.