This paper explores the potential therapeutic role of the naturally occurring sugar heparan sulfate (HS) for the augmentation of bone repair. Scaffolds comprising fibrin glue loaded with 5 microg of embryonically derived HS were assessed, firstly as a release-reservoir, and secondly as a scaffold to stimulate bone regeneration in a critical size rat cranial defect. We show HS-loaded scaffolds have a uniform distribution of HS, which was readily released with a typical burst phase, quickly followed by a prolonged delivery lasting several days. Importantly, the released HS contributed to improved wound healing over a 3-month period as determined by microcomputed tomography (microCT) scanning, histology, histomorphometry, and PCR for osteogenic markers. In all cases, only minimal healing was observed after 1 and 3 months in the absence of HS. In contrast, marked healing was observed by 3 months following HS treatment, with nearly full closure of the defect site. PCR analysis showed significant increases in the gene expression of the osteogenic markers Runx2, alkaline phosphatase, and osteopontin in the heparin sulfate group compared with controls. These results further emphasize the important role HS plays in augmenting wound healing, and its successful delivery in a hydrogel provides a novel alternative to autologous bone graft and growth factor-based therapies.