Masquelet's induced membrane (IM) technique is a promising treatment strategy for the repair of substantial bone defects. The formation of an IM around polymethylmethacrylate bone cement plays a crucial role in this technique. Several studies have indicated that IMs have bioactivity because they contain abundant blood vessels, a variety of cells, and biological factors. The bioactivity of an IM increases during the initial stages of formation, thereby facilitating bone regeneration and remodeling. Nevertheless, the precise mechanisms underlying the enhancement of IM bioactivity and the promotion of bone regeneration necessitate further investigation. In this study, we successfully developed a Masquelet IM model of critical femur defects in rats. By employing proteomics analysis and biological detection techniques, we identified fibromodulin (FMOD) as a pivotal factor contributing to angiogenesis and the enhanced bioactivity of the IM. A significant increase in angiogenesis and the expression of bioactive factors in the IM was also observed with the upregulation of FMOD expression. Furthermore, this effect is mediated through the inhibition of the transforming growth factor beta (TGF-β)/SMAD signaling pathway. We also demonstrated that administering recombinant human FMOD enhanced osteogenesis in rat bone marrow mesenchymal stem cells and angiogenesis in human umbilical vein endothelial cells in vitro. Furthermore, the negative regulatory effect of the TGF-β signaling pathway was verified. In conclusion, this study provides a novel theoretical basis for the application of IMs in bone-defect reconstruction and explores possible new mechanisms that may play an important role in promoting the bioactivity and osteogenic potential of IMs.