A prokaryotic expression system has been used to produce recombinant human bone morphogenetic protein-2 (rhBMP-2). However, low rhBMP-2 yields and protein loss during purification and renaturation are the hurdles in the clinical application. Previous studies have indicated that variables such as temperature, host cell, salt concentration, and culture time affect the final rhBMP-2 yield. The optimization of these conditions in an Escherichia coli culture yielded 28.258 mg of rhBMP-2 per liter of culture. To reduce rhBMP-2 loss during purification and renaturation, we performed purification before renaturation in the prokaryotic expression system instead of using the traditional renaturation-before-purification approach. rhBMP-2 was separated on a Sephacryl S-300 HR column and eluted from a DEAE-Sepharose Fast Flow column. The collected protein was refolded by dialysis with urea buffer, which was followed by dialysis with ultrapure water. The purified rhBMP-2 dimer significantly increased alkaline phosphatase (ALP) activity and osteogenic activity in the femoral muscle and showed the same level of bone-forming activity as natural BMP-2. This optimized procedure for expression and renaturation of rhBMP-2 has potential clinical applications.