Sustained release systems have been developed for the use of growth factors in tissue engineering applications. However, many of these systems continue to have limitations associated with low loading efficiencies and reduced biological activity after release. In this paper, we utilized a lipid-based microtube system for the sustained release of BMP-2. The lipid microtubes were fabricated using a self-assembly method, in order to avoid the use of harsh organic solvents that may damage the protein. BMP-2 was loaded into the microtubes by rehydrating dried microtubes in the protein solution. The loading efficiency and release kinetics of BMP-2 in the microtubes were measured using in vitro immunoassays. Loading efficiency was found to be dependent on microtube concentration. The potential for this system to deliver biologically active BMP-2 was assessed using the alkaline phosphatase assay and von Kossa staining on human mesenchymal stem cell cultures. The results demonstrate that the lipid microtube system is able to provide sustained delivery of biologically active BMP-2 and thereby induce osteogenic differentiation.