Bone morphogenetic proteins (BMPs) are essential during tissue repair and remodeling after injury. Glycosaminoglycan (GAG) sugars are known to enhance BMP activity in vitro and in vivo; here the interactions of BMP-2 with various glycosaminoglycan classes were compared and shown to be selective for heparin over other comparable saccharides. The minimal chain lengths and specific sulfate moieties required for heparin-derived oligosaccharide binding to BMP-2, and the ability of such oligosaccharides to promote BMP-2-induced osteogenic differentiation in vitro were then determined. BMP-2 could bind to heparin hexasaccharides (dp6) and octasaccharides (dp8), but decasaccharides (dp10) were the minimum chain length required for both efficient binding of BMP-2 and consequent heparin-dependent cell responses. N-sulfation is the most important, and 6-O-sulfation moderately important for BMP-2 binding and activity, whereas 2-O-sulfation was much less critical. Bone formation assays in vivo further confirmed that dp10, N-sulfated heparin oligosaccharides were the minimal requirement for effective enhancement of BMP-2-induced bone formation. Such information is necessary for the rational design of the next generations of heparan-based devices for bone tissue repair.