Osteogenesis and angiogenesis acts as an essential role in repairing large tibial defects (LTDs). Total flavonoids of rhizoma drynariae (TFRD), a traditional Chinese medicinal herb, is reported to show anabolic effects on fracture healing. However, whether TFRD could improve the bone formation and angiogenesis in LTDs remains unknown. The purpose of this study was to evaluate the effect of TFRD on bone formation and angiogenesis in LTDs in distraction osteogenesis (DO). Using a previously established fracture model, LTD rats was established with circular external fixator (CEF). All rats then randomly divided into TFRD low dosage group (with DO), TFRD medium dosage group (with DO), TFRD high dosage group (with DO), model group (with DO) and blank group (without DO). Twelve weeks after treatment, according to X-ray and Micro-CT, TFRD groups (especially in medium dosage group) can significantly promote the formation of a large number of epiphyses and improve new bone mineralization compared with model group, and the results of HE and Masson staining and in vitro ALP level of BMSC also demonstrated the formation of bone matrix and mineralization in the TFRD groups. Also, angiographic imaging suggested that total flavonoids of TFRD was able to promote angiogenesis in the defect area. Consistently, TFRD significantly increased the levels of BMP-2, SMAD1, SMAD4, RUNX-2, OSX and VEGF in LTD rats based on ELISA and Real-Time PCR. In addition, we found that ALP activity of TFRD medium dosage group reached a peak after 10 days of induction through BMSC cell culture in vitro experiment. TFRD promoted bone formation in LTD through activation of BMP-Smad signaling pathway, which provides a promising new strategy for repairing bone defects in DO surgeries.