This research examines the bone formation response to release of plasmid DNA encoding human Bone Morphogenetic Protein-2 from hydrogel composites consisting of cationized gelatin microspheres (CGMS) embedded within a crosslinked oligo(poly(ethylene glycol) fumarate) (OPF) hydrogel network in a critical-sized rat cranial defect model after 30 days. Four composite groups were investigated: (1) composites with 10 microg DNA loaded into the CGMS phase, (2) composites with 10 microg DNA loaded into the OPF phase, (3) composites with 100 microg DNA loaded into the OPF phase, and (4) composites without DNA (material control). Light microscopy revealed no enhancement in bone formation for groups releasing plasmid DNA, relative to the material control group. Limited formation of new bone was observed from the defect margins and within the defect for some samples. The hydrogels swelled appreciably and fragmentation of the implants was noted to varying degrees among samples within groups, with a presence of inflammatory cells related to the degree of fragmentation. The lack of enhancement in bone formation indicates that the release of plasmid DNA from the composites was not sufficient to elicit a bone regeneration response.