The objective of this study was to examine alveolar ridge augmentation following implantation of recombinant human bone morphogenetic protein (rhBMP-2) with an allogeneic freeze-dried demineralized bone matrix (DBM) mixed with autologous blood. A second objective was to evaluate bone-to-implant contact in induced bone. Bilateral surgically created supraalveolar ridge defects in five young adult beagle dogs were implanted with the rhBMP-2-DBM-blood device. Transmucosal dental implants were placed at weeks 8 and 16 postsurgery. The animals were euthanized 24 weeks following ridge augmentation. Healing was uneventful in all animals. Radiographic observations indicated substantial bone formation, including regions of radiolucency, at week 8. At week 16, the radiolucencies were generally resolved, and the trabecular structure of the induced bone resembled that of the adjacent residual bone. There were no remarkable differences in radiographic observations between weeks 16 and 24 after ridge augmentation. Histologic analysis revealed dense woven and lamellar induced bone. Any residual DBM appeared remineralized, at least in part. A large portion of the dental implants (≈ 70%) were housed in induced bone with evidence of limited crestal resorption. There was no significant difference in bone density between induced and residual bone, and the levels of bone-to-implant contact were similar (≈ 55%). The rhBMP-2 construct used in this study has a potential to augment alveolar ridge defects. Also, no difference in levels of osseointegration may be expected in induced and residual bone following a two-stage procedure of rhBMP-2-induced ridge augmentation and dental implant placement.