Bone morphogenetic protein 2 (BMP-2) is a potent inducer of osteoblast-mediated bone formation and is used in orthopaedic applications in humans. This study was performed to evaluate (1) recombinant human BMP-2 (rhBMP-2) in clinical cases of subchondral cystic lesion (SCL) in horses and (2) the osteoinductive effects of rhBMP-2 treatment in vitro on primary equine osteoblasts. Three horses with SCLs of the proximal interphalangeal (PIP) joint and associated lameness were treated by transcortical debridement and implantation of a collagen sponge containing rhBMP-2. In the in vitro studies, equine osteoblasts were cultured with rhBMP-2 to assess the effects of rhBMP-2 on their differentiation and mineralization. The treatment of SCLs with rhBMP-2 was well tolerated by all the horses, and improvements in subchondral bone radiographic appearance and lameness score were evident between 7 and 10 months post-surgery. Equine osteoblasts treated with rhBMP-2 demonstrated enhanced mineralization as evidenced by increases in Alizarin Red S staining. This was accompanied by significant increases in alkaline phosphatase (ALP) expression and activity, and a significant decrease in secreted osteocalcin levels. In conclusion rhBMP-2 can be used to assist in subchondral bone repair in horses, and we provide in vitro evidence to suggest that its influence on bone formation is mediated through enhanced osteoblast activity.