Heterotopic ossification (HO) consists of ectopic cartilage and bone formation following severe trauma or invasive surgeries, and a genetic form of it characterizes patients with Fibrodysplasia Ossificans Progressiva (FOP). Recent mouse studies showed that HO was significantly inhibited by systemic treatment with a corticosteroid or the retinoic acid receptor γ agonist Palovarotene. Because these drugs act differently, the data raised intriguing questions including whether the drugs affected HO via similar means, whether a combination therapy would be more effective or whether the drugs may hamper each other's action. To tackle these questions, we used an effective HO mouse model involving subcutaneous implantation of Matrigel plus rhBMP2, and compared the effectiveness of prednisone, dexamathaosone, Palovarotene or combination of. Each corticosteroid and Palovarotene reduced bone formation at max doses, and a combination therapy elicited similar outcomes without obvious interference. While Palovarotene had effectively prevented the initial cartilaginous phase of HO, the steroids appeared to act more on the bony phase. In reporter assays, dexamethasone and Palovarotene induced transcriptional activity of their respective GRE or RARE constructs and did not interfere with each other's pathway. Interestingly, both drugs inhibited the activity of a reporter construct for the inflammatory mediator NF-κB, particularly in combination. In good agreement, immunohistochemical analyses showed that both drugs markedly reduced the number of mast cells and macrophages near and within the ectopic Matrigel mass and reduced also the number of progenitor cells. In sum, corticosteroids and Palovarotene appear to block HO via common and distinct mechanisms. Most importantly, they directly or indirectly inhibit the recruitment of immune and inflammatory cells present at the affected site, thus alleviating the effects of key HO instigators.