The major Food and Drug Association-approved osteoinductive factors in wide clinical use are bone morphogenetic proteins (BMPs). Although BMPs can promote robust bone formation, they also induce adverse clinical effects, including cyst-like bone formation and significant soft tissue swelling. In this study, we evaluated multiple BMP2 doses in a rat femoral segmental defect model and in a minimally traumatic rat femoral onlay model to determine its dose-dependent effects. Results of our femoral segmental defect model established a low BMP2 concentration range (5 and 10 μg/mL, total dose 0.375 and 0.75 μg in 75 μg total volume) unable to induce defect fusion, a mid-range BMP2 concentration range able to fuse the defect without adverse effects (30 μg/mL, total dose 2.25 μg in 75 μg total volume), and a high BMP2 concentration range (150, 300, and 600 μg/mL, total dose 11.25, 22.5, and 45 μg in 75 μg total volume) able to fuse the defect, but with formation of cyst-like bony shells filled with histologically confirmed adipose tissue. In addition, compared to control, 4 mg/mL BMP2 also induced significant tissue inflammatory infiltrates and exudates in the femoral onlay model that was accompanied by increased numbers of osteoclast-like cells at 3, 7, and 14 days. Overall, we consistently reproduced BMP2 side effects of cyst-like bone and soft tissue swelling using high BMP2 concentration approaching the typical human 1500 μg/mL.