Non healing bone defects remain a worldwide health problem and still only few osteoinductive growth factors are available for clinical use in bone regeneration. By introducing BMP-2 residues into growth and differentiation factor (GDF)-5 we recently produced a mutant GDF-5 protein BB-1 which enhanced heterotopic bone formation in mice. Designed to combine positive features of GDF-5 and BMP-2, we suspected that this new growth factor variant may improve long bone healing compared to the parent molecules and intended to unravel functional mechanisms behind its action. BB-1 acquired an increased binding affinity to the BMP-IA receptor, mediated enhanced osteogenic induction of human mesenchymal stem cells versus GDF-5 and higher VEGF secretion than BMP-2 in vitro. Rabbit radius defects treated with a BB-1-coated collagen carrier healed earlier and with increased bone volume compared to BMP-2 and GDF-5 according to in vivo micro-CT follow-up. While BMP-2 callus often remained spongy, BB-1 supported earlier corticalis and marrow cavity formation, showing no pseudojoint persistence like with GDF-5. Thus, by combining positive angiogenic and osteogenic features of GDF-5 and BMP-2, only BB-1 restored a natural bone architecture within 12 weeks, rendering this promising growth factor variant especially promising for long bone regeneration.