In view of their exceptional approach, excellent inherent biocompatibility and biodegradability properties, and interaction with the local extracellular matrix, protein-based polymers have received attention in bone tissue engineering, which is a multidisciplinary field that repairs and regenerates fractured bones. Bone is a multihierarchical complex structure, and it performs several essential biofunctions, including maintaining mineral balance and structural support and protecting soft organs. Protein-based polymers have gained interest in developing ideal scaffolds as emerging biomaterials for bone fractured healing and regeneration, and it is challenging to design ideal bone substitutes as perfect biomaterials. Several protein-based polymers, including collagen, keratin, gelatin, serum albumin, etc., are potential materials due to their inherent cytocompatibility, controlled biodegradability, high biofunctionalization, and tunable mechanical characteristics. While numerous studies have indicated the encouraging possibilities of proteins in BTE, there are still major challenges concerning their biodegradability, stability in physiological conditions, and continuous release of growth factors and bioactive molecules. Robust scaffolds derived from proteins can be used to replace broken or diseased bone with a biocompatible substitute; proteins, being biopolymers, provide excellent scaffolds for bone tissue engineering. Herein, recent developments in protein polymers for cutting-edge bone tissue engineering are addressed in this review within 3−5 years, with a focus on the significant challenges and future perspectives. The first section discusses the structural fundamentals of bone anatomy and ideal scaffolds, and the second section describes the fabrication techniques of scaffolds. The third section highlights the importance of proteins and their applications in BTE. Hence, the recent development of protein polymers for state-of-the-art bone tissue engineering has been discussed, highlighting the significant challenges and future perspectives.