Treatment of large bone defects (LBDs) is technically demanding. Tissue engineering is an option. A bioactive graft may be produced by combining tissue scaffolds and healing promotive factors in order to accelerate bone repair. We investigated the role of Simvastatin (Sim)-embedded porous Gelapin (Gel) scaffold on experimental bone healing. At first, the effectiveness of different concentrations of Gel and Sim powders was investigated in an experimentally induced femoral hole model in rabbits (n = 6) for 30 days. Then bone bioactive grafts were produced by combination of the effective concentrations of Gel, Sim, and Genipin. The bioimplants were subcutaneously tested in a rabbit model (n = 9) to determine their biocompatibility and biodegradability for 10-30 days. Finally, a large radial bone defect model was produced in rabbits (n = 20), and the bioimplants were inserted in the defects. The untreated and autograft-treated bone defects were served as controls. The animals were euthanized after 30 and 60 days of bone injury. The bone samples were evaluated by radiography, three-dimensional CT scan, bone densitometry, histopathology, and nano-indentation. At a concentration of 5 mg/hole, Sim closed the femoral bone holes after 30 days, while in the defect, autograft, and Gel groups, the holes were open. Both the Gel and Gel-Sim scaffolds were biocompatible and biodegradable. Subcutaneously, the Gel-Sim scaffold was replaced with the newly regenerated ectopic bone after 30 days. After implantation of the Gel-Sim scaffold in the radial bone defects, the scaffold was completely replaced with new woven bone after 30 days which was then matured and remodeled into a cortical bone after 60 days. Sixty days after bone injury, the Gel-Sim-treated defects had significantly higher bone volume, matrix mineralization, elastic modulus, and contact hardness when compared to the controls. The Gel-Sim scaffold may be a suitable option in managing LBDs.