Treating serious bone trauma with an osteo-inductive agent such as bone morphogenetic proteins (BMPs) has been considered as an optimized option when delivered via a collagen sponge (CS). Previous works have shown that the BMP concentration and release rate from approved CS carriers is difficult to control with precision. Here we presented the fabrication of a recombinant fusion protein from recombinant human-like collagen (HLC) and human BMP-2 (hBMP2). The fusion protein preserved the characteristic of HLC allowing the recombinant protein to be expressed in Yeast (such as Pichia pastoris GS115) and purified rapidly and easily with mass production after methanol induction. It also kept the stable properties of HLC and hBMP2 in the body fluid environment with good biocompatibility and no cytotoxicity. Moreover, the recombinant fusion protein fabricated a vertical through-hole structure with improved mechanical properties, and thus facilitated migration of bone marrow mesenchymal stem cells (MSCs) into the fusion materials. Furthermore, the fusion protein degraded and released hBMP-2 in vivo allowing osteoinductive activity and the enhancement of utilization rate and the precise control of the hBMP2 release. This fusion protein when applied to cranial defects in rats was osteoinductively active and improved bone repairing enhancing the repairing rate 3.5- fold and 4.2- fold when compared to the HLC alone and the control, respectively. There were no visible inflammatory reactions, infections or extrusions around the implantation sites observed. Our data strongly suggests that this novel recombinant fusion protein could be more beneficial in the treatment of bone defects than the simple superposition of the hBMP2/collagen sponge.