Microbial infections of bones, particularly after joint replacement surgery, are a common occurrence in clinical settings and often lead to osteomyelitis (OM). Unfortunately, current treatment approaches for OM are not satisfactory. To address this issue, this study focuses on the development and evaluation of an injectable magnesium oxide (MgO) nanoparticle (NP)-coordinated phosphocreatine-grafted chitosan hydrogel (CMPMg-VCM) loaded with varying amounts of vancomycin (VCM) for the treatment of OM. The results demonstrate that the loading of VCM does not affect the formation of the injectable hydrogel, and the MgO-incorporated hydrogel exhibits anti-swelling properties. The release of VCM from the hydrogel effectively kills bacteria, with CMPMg-VCM (50) showing the highest antibacterial activity even after prolonged immersion in PBS solution for 12 days. Importantly, all the hydrogels are non-toxic to MC3T3-E1 cells and promote osteogenic differentiation through the early secretion of alkaline phosphatase and calcium nodule formation. Furthermore, experiments using a rat OM model reveal that the CMPMg-VCM hydrogel effectively kills and inhibits bacterial growth, while also protecting the infected bone from osteolysis. These beneficial properties are attributed to the burst release of VCM, which disrupts bacterial biofilm, as well as the release of Mg ions and hydroxyl by the degradation of MgO NPs, which inhibits bacterial growth and prevents osteolysis. Overall, the CMPMg-VCM hydrogel exhibits promising potential for the treatment of microbial bone infections.