Large bone defects present significant clinical challenges, with distraction osteogenesis (DO) requiring prolonged treatment periods and yielding suboptimal outcomes. Calcitonin gene-related peptide (CGRP) demonstrates potent bone-forming activity but suffers from rapid degradation and a short half-life, limiting its therapeutic applications. This study engineered sustained-release CGRP microspheres using poly(D,L-lactide-co-glycolide)/nano-hydroxyapatite/graphene oxide (PLGA/nHA/GO) composite matrices via W/O/W double emulsion-solvent evaporation method to address these limitations. The fabricated microspheres exhibited uniform spherical morphology (51.15 ± 0.40 μm), high encapsulation efficiency (86.14 ± 2.5 %), and sustained CGRP release over 42 days. In vitro studies compared four groups: control (untreated), blank microspheres, free CGRP solution, and CGRP-loaded microspheres. CGRP microspheres significantly enhanced rat bone marrow mesenchymal stem cell proliferation, migration capacity, and osteogenic differentiation compared to all other treatment groups. Mechanistic investigations confirmed activation of the cAMP/PKA/CREB signaling pathway with upregulation of osteogenic transcription factors (Runx2, Osterix) and bone matrix proteins (osteopontin, osteocalcin). In a rat femoral distraction osteogenesis model, CGRP microspheres demonstrated superior bone regeneration compared to control, blank microspheres, and free CGRP groups: substantially increased bone mineral density, significantly improved biomechanical properties, and accelerated bone formation. Histological analysis confirmed enhanced bone maturation and integration This engineered sustained-release system represents a promising therapeutic platform for enhancing bone regeneration through targeted molecular pathway activation, offering significant potential for clinical translation in orthopedic applications.