The efficacy of recombinant human bone morphogenetic protein-2 (rhBMP-2) combined with poly D, L lactic-co-glycolic acid (PLGA)/gelatin sponge complex (PGS) as a carrier on the repair of segmental long-bone defects was evaluated using an ulnar model in dogs. The defect was 2 cm in length and was fixed with bone plating. After implantation of PGS with or without rhBMP-2, the repair process of the defect was evaluated by serial radiography until 16 postoperative weeks. All defects treated with 160 micrograms or 640 micrograms of rhBMP-2/PGS revealed bone union radiographically by 12 postoperative weeks, whereas all defects treated with PGS alone revealed no radiographic evidence of healing throughout the experimental period. In defects treated with 40 micrograms of rhBMP-2/PGS, new bone appeared partially at the defects but did not accomplish union. Bone mineral contents at the defect sites after harvest at 16 weeks postoperatively were significantly (p < 0.05) higher in those treated with 160 micrograms or 640 micrograms of rhBMP-2 than in those treated with 40 micrograms of rhBMP-2 or PGS alone. Histologically, defects radiographically diagnosed as having achieved union showed the appearance of cortical bone and bone marrow cells. These findings suggest the use of rhBMP-2/PGS as a potential bone graft substitute in reconstructive surgery in dogs.