Bone healing is regulated by multiple microenvironmental signals provided by the extracellular matrix (ECM). This study aimed to mimic the native osteoinductive microenvironment by developing an ECM using gene-transduced cells. The LIM mineralization protein-1 (LMP-1) gene was transferred to murine pre-osteoblast cells (MC3T3-E1) using lentiviral vectors. Western blotting assay indicated that the MC3T3-E1 cells expressed an increased level of bone morphologic protein-2, -4 and -7 (BMP-2, -4 and -7) after LMP-1 gene transduction. The transduced cells were then seeded into calcined bovine bone scaffolds and cultured for 7, 14, and 21 days to construct ECMs on the scaffolds. The ECM-scaffold composites were then decellularized using the freeze-drying method. Scaffolds without ECM deposition were used as controls. The composites and controls were implanted into critical-sized bone defects created in the distal femurs of New Zealand rabbits. Twelve weeks after the surgery, both microcomputed tomography and histologic results indicated that the 7-day-cell-modified ECM-scaffold composites induced bone regeneration with significantly larger volume, trabecular thickness and connectivity than the controls. However, the 14- and 21-day-cell-modified ECM-scaffold composites triggered sustained inflammation response even at 12 weeks after the surgery and showed less bone ingrowth and integration than their 7-day-cell-modified counterparts. In conclusion, these results highlight the viable gene transfer techniques for manipulating cells in a constructed microenvironment of ECM for bone regeneration. However, the unresolved inflammation relating to the duration of ECM modification needs to be considered.