Steroid-associated osteonecrosis (SAON) may lead to joint collapse and subsequent joint replacement. Poly lactic-co-glycolic acid/tricalcium phosphate (P/T) scaffold providing sustained release of icaritin (a metabolite of Epimedium-derived flavonoids) was investigated as a bone defect filler after surgical core-decompression (CD) to prevent femoral head collapse in a bipedal SAON animal model using emu (a large flightless bird). The underlying mechanism on SAON was evaluated using a well-established quadrupedal rabbit model. Fifteen emus were established with SAON, and CD was performed along the femoral neck for the efficacy study. In this CD bone defect, a P/T scaffold with icaritin (P/T/I group) or without icaritin (P/T group) was implanted while no scaffold implantation was used as a control. For the mechanistic study in rabbits, the effects of icaritin and composite scaffolds on bone mesenchymal stem cells (BMSCs) recruitment, osteogenesis, and anti-adipogenesis were evaluated. Our efficacy study showed that P/T/I group had the significantly lowest incidence of femoral head collapse, better preserved cartilage and mechanical properties supported by more new bone formation within the bone tunnel. For the mechanistic study, our in vitro tests suggested that icaritin enhanced the expression of osteogenesis related genes COL1α, osteocalcin, RUNX2, and BMP-2 while inhibited adipogenesis related genes C/EBP-ß, PPAR-γ, and aP2 of rabbit BMSCs. Both P/T and P/T/I scaffolds were demonstrated to recruit BMSCs both in vitro and in vivo but a higher expression of migration related gene VCAM1 was only found in P/T/I group in vitro. In conclusion, both efficacy and mechanistic studies show the potential of a bioactive composite porous P/T scaffold incorporating icaritin to enhance bone defect repair after surgical CD and prevent femoral head collapse in a bipedal SAON emu model.