As an efficient controlled release system of rhBMP-2, a functional nanoparticle-130 KDa 5% Hyaluronic Acid (HA) based hydrogel-Nanoparticle(NP) complex was developed and used as a bone transplant. In vivo bone formation was evaluated by soft x-ray, histology, alkaline phosphatase (ALP)/Osteocalcin activity and mineral contents analysis, based on the rat calvarial critical size defect (8 mm in diameter) model. Significantly, effective bone regeneration was achieved with the rhBMP-2 loaded HA based hydrogel-NP complex and the BMP-2 loaded HA based hydrogel as compared to only HA hydrogel group with the period of 4 weeks. These improved results included areas such as radiodensity, the bone specific ALP activity, the osteocalcin immunoreactivity, and the ratio of calcium and phosphate contents with respect to normal bone in the regenerated bone area. Although superiority of bone regenration in the rhBMP-2 loaded HA based hydrogel-NP complex group could not be confirmed statistically, all the evaluation parameters were higher in the rhBMP-2 loaded HA based hydrogel-NP complex group than in the the BMP-2 loaded HA based hydrogel group. These results indicate that the HA based hydrogel with nanoparticle complex can be a promising candidate for a new bone defect replacement matrix, and an enhanced BMP-2 scaffold.