Various types of biomaterials have been widely used to treat complex bone defects. However, potential infection risks and inappropriate host immune responses induced by biomaterials can adversely affect the final bone repair outcome. Therefore, the development of novel bone biomaterials with antibacterial and immunomodulatory capabilities is conducive to achieving a good interaction between the host and material, thereby creating a local microenvironment favorable for osteogenesis and ultimately accelerating bone regeneration. In this study, we fabricated a porcine small intestinal submucosa (SIS) hydrogel containing LL37 peptides and polylactic-glycolic acid (PLGA) microspheres encapsulated with WP9QY(W9) peptide (LL37-W9/PLGA-SIS), which can fill irregular bone defects and exhibits excellent mechanical properties. In vitro experiments showed that the microsphere-gel composite system had sequential drug release characteristics. The LL37 peptide released first had good antibacterial performance and BMSC recruitment ability, which could prevent infection at an early stage and increase the number of BMSCs at the injured site. In addition, it also has immunomodulatory properties, showing both pro-inflammatory and anti-inflammatory activities, but its early pro-inflammatory properties are more inclined to activate the M1 phenotype of macrophages. Moreover, the subsequently released W9 peptide not only reduced the expression of pro-inflammatory genes to alleviate inflammation and induced more macrophages to convert to M2 phenotypes but also promoted the osteogenic differentiation of BMSCs. This finely regulated immune response is considered to be more closely related to the physiological bone healing process. When studying the interaction between macrophages and BMSCs mediated by the material, it was found that the immunomodulatory and osteogenic effects were enhanced. In vivo experiments, we constructed rat skull defect models, which further proved that LL37-W9/PLGA-SIS gel can properly regulate the immune response, and has a good ability to promote osteogenesis in situ. In conclusion, the LL37-W9/PLGA-SIS hydrogel has great application prospects in immune regulation and bone therapy.