Demineralized bone matrix (DBM) is a collagen-based scaffold, but its low mechanical strength and limited BMP-2 binding ability restrict its application in bone repair. It is known that heparin could be immobilized onto scaffolds to enhance their binding of growth factors with the heparin-binding domain. Here, we crosslinked heparin to DBM to increase its BMP-2 binding ability. To our surprise, the mechanical strength of DBM was also dramatically increased. The compression modulus of heparin crosslinked DBM (HC-DBM) have improved (seven-fold increased) under wet condition, which would allow the scaffolds to keep specific shapes in vivo. As expected, HC-DBM showed specific binding ability to BMP-2. Additional studies showed the bound BMP-2 exerted its function to induce cell differentiation on the scaffold. Subcutaneous implantation of HC-DBM carrying BMP-2 showed higher alkaline phosphatase (ALP) activity (2 weeks), more calcium deposition (4 and 8 weeks) and more bone formation than that of control groups. It is concluded that HC-DBM has increased mechanical intensity as well as specific BMP-2 binding ability; HC-DBM/BMP-2 enhances the osteogenesis and therefore could be an effective medical device for bone repair.