In the US alone, approximately 500,000 patients annually undergo surgical procedures to treat bone fractures, alleviate severe back pain through spinal fusion procedures, or promote healing of non-unions. Many of these procedures involve the use of bone graft substitutes. An alternative to bone grafts are the bone morphogenetic proteins (BMPs), which have been shown to induce bone formation. For optimal effect, BMPs must be combined with an adequate matrix, which serves to prolong the residence time of the protein and, in some instances, as support for the invading osteoprogenitor cells. Several factors involved in the preparation of adequate matrices, specifically collagen sponges, were investigated in order to test the performance in a new role as an implant providing local delivery of an osteoinductive differentiation factor. Another focus of this review is the current system consisting of a combination of recombinant human BMP-2 (rhBMP-2) and an absorbable collagen sponge (ACS). The efficacy and safety of the combination has been clearly proven in both animal and human trials.