In this work, the recombinant human bone morphogenetic protein 2 (rhBMP-2) gene was cloned from MG-63 cells by RT-PCR, and the protein was expressed in Escherichia coli expression system, purified by Ni–NTA column under denaturing conditions and refolded at 4 C by urea gradient dialysis. We found that the protein refolding yield was increased with the increase of pH value from pH 6.0 to pH 9.0. The yield was 42% and 96% at pH 7.4 and pH 9.0, respectively, while that at pH 6.0 was only 3.4%. The cell culture results showed that the rhBMP-2 refolded at pH 7.4 urea gradient dialysis had higher biological activity for MG-63 cell proliferation and differentiation than that refolded at pH 9.0 since pH 7.4 is closer to the conditions in vivo leading to the formation of dimers through the interchain disulfide bond. Moreover, the biological activity for MG-63 was promoted with the increase of rhBMP-2 concentration in the cell culture medium. This work may be important for the in vitro production and biomedical application of rhBMP-2 protein.