Nanoparticle (NP)-based delivery has gained importance for improving the potency of therapeutic agents. The bovine serum albumin (BSA) NPs, obtained by a coacervation process, was modified by electrostatic adsorption of cationic polyethylenimine (PEI) to NP surfaces for delivery of bone-inducing growth factor, bone morphogenetic protein-2 (BMP-2). Different concentrations of PEI were utilized for coating BSA NPs to stabilize the colloidal system and to control the release of BMP-2. The NPs were characterized by size and zeta potential measurements, as well as by Scanning Electron Microscopy and Atomic Force Microscopy. The encapsulation efficiency was typically >90% in all NP preparations. In vitro release kinetics showed that the PEI concentration used for coating the NPs efficiently controlled the release of BMP-2, demonstrating a gradual slowing, sustained release pattern during a 10-day study period. The bioactivity of the encapsulated BMP-2 and the toxicity of the NPs were examined by the alkaline phosphatase (ALP) induction assay and the MTT assay, respectively, using C2C12 cells. The results indicated that PEI was the primary determinant of NP toxicities, and BSA NPs coated with 0.1 mg/mL PEI demonstrated tolerable toxicity, retained the bioactivity of BMP-2, and efficiently slowed the release rate of BMP-2. We conclude that BMP-2 encapsulated in BSA NPs might be an efficient way to deliver the protein for in vivo bone induction.