A biodegradable, composite bone graft, composed of chitosan microspheres embedded in calcium sulfate, was evaluated in vitro for point-of-care loading and delivery of antibiotics and growth factors to prevent infection and stimulate healing in large bone injuries. Microspheres were loaded with rhBMP-2 or vancomycin prior to mixing into calcium sulfate loaded with vancomycin. Composites were evaluated for set time, drug release kinetics, and bacteriostatic/bactericidal activity of released vancomycin, induction of ALP expression by released rhBMP-2, and interaction of drugs on cells. Results showed the composite set in under 36 min and released vancomycin levels that were bactericidal to S. aureus (>MIC 8-16 μg/mL) for 18 days. Composites exhibited a 1 day-delayed release, followed by a continuous release of rhBMP-2 over 6 weeks; ranging from 0.06 to 1.49 ng/mL, and showed a dose dependent release based on initial loading. Released rhBMP-2 levels were, however, too low to induce detectable levels of ALP in W20-17 cells, due to the affinity of rhBMP-2 for calcium-based materials. With stimulating amounts of rhBMP-2 (>50 ng/mL), the ALP response from W-20-17 cells was inhibited when exposed to high vancomycin levels (1,800-3,600 μg/mL). This dual-delivery system is an attractive alternative to single delivery or preloaded systems for bone regeneration since it can simultaneously fight infection and deliver a potent growth factor. Additionally, this composite can accommodate a wide range of therapeutics and thus be customizable for specific patient needs, however, the potential interactive effects of multiple agents must be investigated to ensure that functional activity is not altered.