With an aging population the frequency of postmenopausal fractures is increasing. Methods to enhance the repair of osteoporotic bone repair therefore become more important to reduce the society burden of care. We asked if absorbable collagen sponges containing recombinant human bone morphogenetic protein-2 (rhBMP-2) have the potential to enhance bone repair. We randomly assigned 40 rats into the ovariectomy and sham operation groups. A segmental defect was created in the right tibia 12 weeks after ovariectomy. rhBMP-2-containing absorbable collagen sponges were implanted into the defect in half of the animals in each group. We analyzed radiographs and histological sections and performed three-point bending tests to assess repair. Radiological scores in the rhBMP-2 applied rats were higher than those in controls at the end of 8 weeks after tibial osteotomy. The specimens failed under higher loads in the rhBMP-2-applied groups and histology revealed a higher fracture healing score, including callus formation, bone union, marrow changes, and cortex remodeling. We observed no adverse tissue responses such as fibrous connective tissue formation and inflammatory cellular infiltration. rhBMP-2 in absorbable collagen sponges enhanced bone repair in segmental tibial defects of ovariectomized rats. The sponges with rhBMP-2 appeared to enhance bone repair.