Carriers for bone morphogenetic protein-2 (BMP-2) used in clinical practice still suffer from limitations such as insufficient protein retention. In addition, there is a clinical need for injectable carriers. The main objective of this study was to assess bone forming ability of rhBMP-2 combined either with chitosan hydrogel (rhBMP-2/CH) or chitosan hydrogel containing β-tricalcium phosphate (β-TCP) (rhBMP-2/CH/TCP). Formulations were first compared in a rat ectopic intramuscular bone formation model, and the optimal formulation was further evaluated in healing of 15-mm critical size defect in the radius of a rabbit. Three weeks after injection ectopically formed bone was analyzed by microcomputerized tomography (micro-CT) and histology. Significantly higher (4.7-fold) mineralized bone formation was observed in the rhBMP-2/CH/TCP group compared to rhBMP-2/CH group. In a pilot study, defect in a rabbit radius treated with rhBMP-2/CH/TCP showed incomplete regeneration at 8 weeks with composite leakage from the defect, indicating the need for formulation refinement when segmental defect repair is foreseen.