Three cysteine analogues of bone morphogenetic protein (BMP)-2, BMP2A2C, BMP2N56C, and BMP2E96C, were generated in order to enable the attachment of SH-reactive poly(ethylene glycol) (PEG) at specific sites. Three different approaches (Ap) were used for SH-specific PEGylation: (Ap1) reaction of glutathione activated proteins with thiol PEG; (Ap2) reaction of DTT reduced proteins with orthopyridyl disulfide PEG; (Ap3) reaction of DTT reduced proteins with maleimide PEG. Non-, mono-, and di-PEGylated BMP-2 analogues could be separated by RP-HPLC. Trypsin digestion of PEGylated proteins and Trypsin and GluC double-digestion of N-ethylmaleimide-labeled proteins confirmed that the modifications were site-specific. Surface plasmon resonance analysis of type I and type II receptor binding of the PEGylated BMP-2 analogues revealed that all three PEGylation approaches were equivalent. PEGylation at positions 2 and 96 caused a similar decrease in receptor affinity. PEGylation at position 56 resulted in a larger decrease in affinity for both types of receptors. Mono-PEGylated BMP-2 analogues exhibited intermediate affinities in comparison with unmodified and di-PEGylated proteins. However, the biological activity of the PEGylated BMP-2 analogues as measured in alkaline phosphatase assay was higher than BMP-2 wild-type for the PEGylated BMP2A2C, slightly reduced for the BMP2N56C, and strongly reduced for the BMP2E96C. These results taken together indicate that specific attachment of PEG at engineered sites of BMP-2 is possible and that the attachment site is critical for biological activity. Furthermore, the biological activity of PEGylated BMP-2 analogues in cell culture seems to be determined not only by receptor affinity, but also by other factors such as protein solubility and stability. It is also discussed that the attached PEG interferes with the binding of BMP-2 to modulator proteins, co-receptors, or heparinic sites of proteoglycans in the extracellular matrix.