Type 2 diabetes (T2D) results in physiological and structural changes in bone, contributing to poor fracture healing. T2D compromises microvascular performance, which can negatively impact bone regeneration as angiogenesis is required for new bone formation. We examined the effects of bone morphogenetic protein-2 (BMP-2) administered locally at the time of femoral segmental bone defect (SBD) surgery, and its angiogenic impacts on endothelial cells (ECs) isolated from the ipsilateral or contralateral tibia in T2D mice. Male C57BL/6 mice were fed either a low-fat diet (LFD) or high-fat diet (HFD) starting at 8 weeks. After 12 weeks, the T2D phenotype in HFD mice was confirmed via glucose and insulin tolerance testing and echoMRI, and all mice underwent SBD surgery. Mice were treated with BMP-2 (5 µg) or saline at the time of surgery. Three weeks postsurgery, bone marrow ECs were isolated from ipsilateral and contralateral tibias, and proliferation, angiogenic potential, and gene expression of the cells was analyzed. BMP-2 treatment increased EC proliferation by two fold compared with saline in LFD contralateral tibia ECs, but no changes were seen in surgical tibia EC proliferation. BMP-2 treatment enhanced vessel-like structure formation in HFD mice whereas, the opposite was observed in LFD mice. Still, in BMP-2 treated LFD mice, ipsilateral tibia ECs increased expression of CD31, FLT-1, ANGPT1, and ANGPT2. These data suggest that the modulating effects of T2D and BMP-2 on the microenvironment of bone marrow ECs may differentially influence angiogenic properties at the fractured limb versus the contralateral limb.