In this study, a two part bone tissue engineering scaffold was investigated consisting of a solid poly(propylene fumarate) (PPF) intramedullary rod for mechanical support surrounded by a porous PPF sleeve for osseointegration and delivery of poly(DL-lactic-co-glycolic acid) (PLGA) microspheres with adsorbed recombinant human bone morphogenetic protein-2 (rhBMP-2). Scaffolds were implanted into critical size rat segmental femoral defects with internal fixation for 12 weeks. Bone formation was assessed throughout the study via radiography, and following euthanasia via micro-CT and histology. Mechanical stabilization was evaluated further via torsional testing. Experimental implant groups included the PPF rod alone and the rod with a porous PPF sleeve containing PLGA microspheres with 0, 2, or 8 μg of rhBMP-2 adsorbed onto their surface. Results showed that presence of the scaffold increased mechanical stabilization of the defect, as evidenced by the increased torsional stiffness of the femurs by the presence of a rod compared to the empty defect. Although the presence of a rod decreased bone formation, the presence of a sleeve combined with a low or high dose of rhBMP-2 increased the torsional stiffness to 2.06 ± 0.63 N·mm and 1.68 ± 0.56 N·mm, respectively, from 0.56 ± 0.24 N·mm for the rod alone. The results indicate that, while scaffolds may provide structural support to regenerating tissues and increase their mechanical properties, the presence of scaffolds within defects may hinder overall bone formation if they interfere with cellular processes.