The failure of orthopedic implants in osteoporotic patients is attributed to the lack of sufficient bone stock and regenerative capacity but most treatments for osteoporosis fail to address this issue. rhBMP-2 is known to promote bone formation under normal conditions but has not been used clinically in the osteoporotic condition. Osteoporosis was induced in 19 ewes using ovariectomy, low calcium diet, and steroid injection. After induction, the steroid was withdrawn and pellets containing inert carrier with rhBMP-2 in either slow or fast-release formulation were implanted into the lumbar vertebrae of each animal. After 2, 3, and 6 months the spines were harvested and assessed for changes in BMD and histomorphometric indices. BMD did not change after cessation of steroid treatment. After 2 months BV/TV increased in the vicinity of the pellets containing the fast-release rhBMP-2 and was sustained for the duration of the study. Focal voids surrounding all implants, particularly the slow-release formulation, were observed initially but resolved with time. Increased BV/TV adjacent to rhBMP-2 pellets suggests it could be used for localized treatment of osteoporosis. Refinement of the delivery system and supplementary treatments may be necessary to overcome the initial catabolic effects of rhBMP-2. © 2013 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. J Orthop Res 31:1390–1397, 2013.