Bone morphogenetic protein 2 (BMP-2) is the most powerful osteogenic factor; its effectiveness in enhancing osteoblastic activation has been confirmed both in vitro and in vivo. We developed a novel peptide (designated P24) derived from the 'knuckle' epitope of BMP-2 and found it also had osteogenic bioactivity to some extent. The main objective of this study was to develop a controlled release system based on poly(trimethylene carbonate)-F127-poly(trimethylene carbonate) (PTMC11-F127-PTMC11) hydrogels for the P24 peptide, to promote bone formation. By varying the copolymer concentrations, we demonstrated that P24/PTMC11-F127-PTMC11 hydrogels were an efficient system for the sustained release of P24 over 21-35 days. The P24-loaded hydrogels elevated alkaline phosphatase activity and promoted the expression of osteocalcin mRNA in bone marrow stromal cells (BMSCs) in vitro. Radiographic and histological examination showed that P24-loaded hydrogels could induce more effective ectopic bone formation in vivo than P24-free hydrogels. These results indicate that the PTMC11-F127-PTMC11 hydrogel is a suitable carrier for the controlled release of P24, and is a promising injectable biomaterial for the induction of bone regeneration.