Objective To study the role of bone morphogenetic protein-7 in the osteogenic differentiation of periosteal cellsin vitro. Methods Periosteal cells, obtained from adult tibial periosteum, were cultured by routine method in vitro, and divided into two groups. One group cultured with BMP7 and the supplements of 100 nmol dexametasone, 10 mmol b-glycerophosphate and 50 mg/mL L-ascorbic acid (BMP7 group), the other cultured with the supplements alone as the control (control group). Ultrastructure and morphological changes of periosteal cells were observed by contrast phase microscope and electron microscope. In order to test the expression of markers of osteoblastic differantiation in periosteal cells, involved mineralized node and alkaline phosphatase. Each group was tested at the time of 5 d, 10 d, 15 d, 20 d, respectively, using ALP kit stain and Von Kossa stain with 3 samples at each time. Results The periosteal cells cultured by routine method and induced into osteoblast differentiation with BMP7 were both growing well, in vitro. Microscope observations showed that the periosteal cells were spindle-shaped, well-stacked, transparent and three-dimensional in the early stage, and cube-shaped or puncheon shaped in the mitotic phase, gradually became wide shuttle and irregular shape with a lot secretion in telophase. The positive cells were visible by the ALP kit staining and Von Kossa staining of calcium nodules at 5 d, 10 d, 15 d and 20 d in both groups.A difference of positive rate at each time point was found between BMP7 group and control group at 5 d, 10 d, 15 d, 20 d, and the difference was statistically significant (P ＜ 0.01). Conclusion It displayed well regeneration and osteogenesis ability in the periosteal cell. BMP7 has definite osteo-inductive activity, which can obviously enhance the proliferation and ossifyng differentiation of periosteal cells.