Traumatic musculoskeletal injuries that result in bone defects or fractures often affect both bone and the surrounding soft tissue. Clinically, these types of multi-tissue injuries have increased rates of complications and long-term disability. Vascular integrity is a key clinical indicator of injury severity, and revascularization of the injury site is a critical early step of the bone healing process. Our lab has previously established a pre-clinical model of composite bone-muscle injury that exhibits impaired bone healing; however, the vascularization response in this model had not yet been investigated. Here, the early revascularization of a bone defect following composite injury is shown to be impaired, and subsequently the therapeutic potential of combined vascularization and osteoinduction was investigated to overcome the impaired regeneration in composite injuries. A decorin (DCN)-supplemented collagen hydrogel was developed as a biomaterial delivery vehicle for the co-delivery microvascular fragments (MVF), which are multicellular segments of mature vasculature, and bone morphogenetic protein-2 (BMP-2), a potent osteoinductive growth factor. We hypothesized that collagen + DCN would increase BMP-2 retention over collagen alone due to DCN’s ability to sequester TGF-ß growth factors. We further hypothesized that MVF would increase both early vascularization and subsequent BMP-2-mediated bone regeneration. Contrary to our hypothesis, BMP + MVF decreased the number of blood vessels relative to BMP alone and had no effect on bone healing. However, collagen + DCN was demonstrated to be a BMP-2 delivery vehicle capable of achieving bridging in the challenging composite defect model that is comparable to that achieved with a well-established alginate-based delivery system. Statement of SignificanceWe have previously established a model of musculoskeletal trauma that exhibits impaired bone healing. For the first time, this work shows that the early revascularization response is also significantly, albeit modestly, impaired. A decorin-supplemented collagen hydrogel was used for the first time in vivo as a delivery vehicle for both a cell-based vascular therapeutic, MVF, and an osteoinductive growth factor, BMP-2. While MVF did not improve vascular volume or bone healing, collagen + DCN is a BMP-2 delivery vehicle capable of achieving bridging in the challenging composite defect model. Based on its support of robust angiogenesis in vitro, collagen + DCN may be extended for future use with other vascular therapeutics such as pre-formed vascular networks.