Controlled and sustained delivery of therapeutic proteins is crucial for achieving desired effects in wound healing applications. Yet, this remains a challenge in growth factor delivery for bone tissue engineering. Current delivery systems can lead to negative side effects, such as ectopic bone growth and cancer, due to the over administration of growth inducing proteins. Here, we have developed a two-phase system for the controlled release of therapeutic proteins. The system consists of protein-loaded poly(methacrylic acid)-based nanoparticles conjugated to chitosan scaffolds. The effect of co-monomer hydrophilicity and crosslinking density on nanoparticle properties was evaluated. It was found that the release kinetics of model therapeutic proteins were dependent on nanoparticle hydrophilicity. The chitosan scaffold, chosen for its biocompatibility and osteogenic properties, provided additional barriers to diffusion and promoted nanoparticle retention, leading to more sustained protein delivery. Additionally, the ability of MC3T3-E1 pre-osteoblast cells to proliferate on scaffolds with and without conjugated nanoparticles was evaluated and all scaffolds were shown to promote cell growth. The results demonstrate that the two-phase scaffold system presents a superior strategy for the sustained and controlled release of therapeutic proteins for bone tissue engineering applications.