A local drug delivery system that attempts to find a suitable balance between antimicrobial and regenerative actions was developed for osteomyelitis treatment (OM). This system combines the angiogenic and immunomodulatory peptide LLKKK18 (LL18) and vancomycin hydrochloride (VH), loaded into an injectable oxidized dextrin (ODEX)-based hydrogel (HG). In vitro cytotoxicity was analyzed in MC3T3-E1 pre-osteoblasts and erythrocytes. The kinetics of LL18 release was studied. Antimicrobial activity was assessed in vitro against a clinical Methicillin-Resistant Staphylococcus aureus (MRSA) strain. A rat model of acute OM was developed by direct inoculation into a tibia defect, concomitantly with the implantation of the drug-loaded HG. The local bioburden was quantified and damage in surrounding tissues was examined histologically. In vitro, ODEX-based HG displayed a safe hemolytic profile. Half of LL18 (53%) is released during the swelling phase at physiological pH, then being gradually released until complete HG degradation. LL18-loaded HG at 300 μM was the most effective peptide formulation in decreasing in vivo infection among concentrations ranging from 86 to 429 μM. The histopathological scores observed in vivo varied with the LL18 concentration in a dose-dependent manner. VH at 28 mM completely eradicated bacteria, although with substantial tissue injury. We have found that sub-millimolar doses of VH combined with LL18 at 300 μM may suffice to eradicate the infection, with reduced tissue damage. We propose an easy-to-handle, shape-fitting HG formulation with the potential to treat MRSA-infected bone with low VH doses associated with LL18.