Recombinant human erythropoietin (EPO) with additional N-terminal heparin-binding protein domain (HBD) from bone morphogenetic protein 2 was synthesized in Escherichia coli cells. A procedure for HBD-EPO purification and refolding was developed for obtaining highly-purified HBD-EPO. The structure of recombinant HBD-EPO was close to that of the native EPO protein. HBD-EPO contained two disulfide bonds, as shown by MALDI-TOF mass spectrometry. The protein demonstrated in vitro biological activity in the proliferation of human erythroleukemia TF-1 cell test and in vivo activity in animal models. HBD-EPO increased the number of reticulocytes in the blood after subcutaneous injection and displayed local angiogenic activity after subcutaneous implantation of demineralized bone matrix (DBM) discs with immobilized HBD-EPO. We developed a quantitative sandwich ELISA method for measuring HBD-EPO concentration in solution using rabbit polyclonal serum and commercial monoclonal anti-EPO antibodies. Pharmacokinetic properties of HBD-EPO were typical for bacterially produced EPO. Under physiological conditions, HBD-EPO can reversibly bind to DBM, which is often used as an osteoplastic material for treatment of bone pathologies. The data on HBD-EPO binding to DBM and local angiogenic activity of this protein give hope for successful application of HBD-EPO immobilized on DBM in experiments on bone regeneration.