Bone defects are often difficult to treat due to their complexity and specificity, and therefore pose a serious threat to human life and health. Currently, the clinical treatment of bone defects is mainly surgical. However, this treatment is often more harmful to patients and there is a potential risk of rejection and infection. Hydrogels have a unique three-dimensional structure that can accommodate a variety of materials, including particles, polymers and small molecules, making them ideal for treating bone defects. Therefore, emerging composite hydrogels are considered one of the most promising candidates for the treatment of bone defects. This review describes the use of different types of composite hydrogel in the treatment of bone defects. We present the basic concepts of hydrogels, different preparation techniques (including chemical and physical crosslinking), and the clinical requirements for hydrogels used to treat bone defects. In addition, a review of numerous promising designs of different types of hydrogel doped with different materials (e.g., nanoparticles, polymers, carbon materials, drugs, and active factors) is also highlighted. Finally, the current challenges and prospects of composite hydrogels for the treatment of bone defects are presented. This review will stimulate research efforts in this field and promote the application of new methods and innovative ideas in the clinical field of composite hydrogels.