BMP-2 like other bone morphogenetic proteins, plays an important role in the development of bone and cartilage. It is involved in the hedgehog pathway, TGF beta signaling pathway, and in cytokine-cytokine receptor interaction. It is also involved in cardiac cell differentiation and epithelial to mesenchymal transition.

Like many other proteins from the BMP family, BMP-2 has been demonstrated to potently induce osteoblast differentiation in a variety of cell types.

BMP-2 may be involved in white adipogenesis and may have metabolic effects