rhBMP-2 is an osteoinductive protein that, when administered locally, results in the induction of new bone tissue at the site of implantation. The osteoinductive properties of rhBMP-2 first were demonstrated by implantation at ectopic (nonbony) sites in rodents. BMPs are the only protein factors known to induce new, ectopic bone. rhBMP-2/Absorbable Collagen Sponge (ACS) is a TEMP that combines rhBMP-2 with a matrix for implantation. rhBMP-2/ACS is used in long bone fracture repair and spinal fusion. The development of rhBMP-2 protein as the active ingredient in the rhBMP-2/ACS product is summarized. Four aspects of rhBMP-2 development are covered: protein structural characterization, functional characterization, purity analysis and design of comparability studies to support changes in the manufacturing process. Topics discussed include rhBMP-2 as a “biologic” and as a constituent of a combination TEMP. The lessons learned during the development of rhBMP-2/ACS may allow general insight into the development of future standards for TEMPs that contain biologically active proteins.