The specific role of endogenous Bmp2 gene in chondrocytes and in osteoblasts in fracture healing was investigated by generation and analysis of chondrocyte- and osteoblast-specific Bmp2 conditional knockout (cKO) mice. The unilateral open transverse tibial fractures were created in these Bmp2 cKO mice. Bone fracture callus samples were collected and analyzed by X-ray, micro-CT, histology analyses, biomechanical testing and gene expression assays. The results demonstrated that the lack of Bmp2 expression in chondrocytes leads to a prolonged cartilage callus formation and a delayed osteogenesis initiation and progression into mineralization phase with lower biomechanical properties. In contrast, when the Bmp2 gene was deleted in osteoblasts, the mice showed no significant difference in the fracture healing process compared to control mice. These findings suggest that endogenous BMP2 expression in chondrocytes may play an essential role in cartilage callus maturation at an early stage of fracture healing. Our studies may provide important information for clinical application of BMP2.