Supraphysiologic doses of bone morphogenetic protein-2 (BMP-2) are used clinically to promote bone formation in fracture nonunions, large bone defects, and spinal fusion. However, abnormal bone formation (i.e., heterotopic ossification) caused by rapid BMP-2 release from conventional collagen sponge scaffolds is a serious complication. We leveraged the strong affinity interactions between heparin microparticles (HMPs) and BMP-2 to improve protein delivery to bone defects. We first developed a computational model to investigate BMP-2-HMP interactions and demonstrated improved in vivo BMP-2 retention using HMPs. We then evaluated BMP-2-loaded HMPs as a treatment strategy for healing critically sized femoral defects in a rat model that displays heterotopic ossification with clinical BMP-2 doses (0.12 mg/kg body weight). HMPs increased BMP-2 retention in vivo, improving spatial localization of bone formation in large bone defects and reducing heterotopic ossification. Thus, HMPs provide a promising opportunity to improve the safety profile of scaffold-based BMP-2 delivery.