The immunomodulatory property of biomaterials is vital in determining the in vivo fate of implants and tissue regeneration. Bone morphogenetic protein-2 (BMP-2) has been identified as an effective inducer of osteogenic differentiation for bone repair. But it is still unclear how the immunomodulatory effects of materials impact on BMP-2-mediated osteogenesis. Herein, this study aims to investigate the immunoregulatory role of 2-N,6-O-sulfated chitosan (26SCS), a sulfated polysaccharide, in the osteogenetic capacity of BMP-2 and the subsequent effects on bone regeneration. It was noted that 26SCS can robustly activate a moderate pro-inflammatory macrophage response initially, followed by transitioning towards an anti-inflammatory response later on. The immune microenvironment caused by 26SCS could facilitate bone marrow stromal cell (BMSC) chemoattraction. Furthermore, 26SCS significantly up-regulated the expression of BMPR-IA as well as amplified BMP-2-activated BMP/Smad signaling. In addition, the 26SCS-triggered immune microenvironment had a positive effect on proangiogenesis by BMSCs. Our findings suggest that 26SCS may be involved in the induction of a favorable immune microenvironment enhancing crosstalk between immune cells and stem cells undergoing osteogenic differentiation. This relationship is likely responsible for the enhanced bone tissue development observed with 26SCS in an ectopic ossification model.