Autologous or allogeneic bone grafts are common methods to treat bone defects. Bone tissue engineering combining carrier material with the active factor can induce a generation of new bone at the bone defect site. However, its clinical application is restricted by the limited donors, the high morbidity at the donor site, the low activity in vivo, and dose-independent adverse effect. To overcome the limitations of traditional therapies, it is urgent to find and develop a repair material that can replace natural bones. Hence, we designed and prepared suitable MPEG-PCL microspheres loaded bone morphogenetic protein-2 (BMP-2/MPEG-PCL-MS) to effectively solve the problem mentioned above, prolong its reaction time at the targeted site, and avoid the pain of patients caused by frequent administration. The physicochemical properties and in vitro release behaviors were good. The microspheres showed high biocompatibility and strongly induced osteogenesis in vivo. BMP-2/MPEG-PCL-MS has been proven to exert sustained-release in vivo and maintain the inherent BMP-2 activity. They can be directly injected into the bone defect site, or implanted to a large bone defect site together with stent material to exert therapeutic effects. Hence, this smart drug delivery system has promising potential for clinical applications and provides a well-controlled design for combination of tissue engineering and pharmaceutics for further exploration.