Angiogenesis is a vital process during the regeneration of bone tissue. The aim of this study was to investigate angiogenesis at the fracture site as well as at distal locations from obesity-induced type 2 diabetic mice that were treated with bone morphogenetic protein-2 (BMP-2, local administration at the time of surgery) to heal a femoral critical sized defect (CSD) or saline as a control. Mice were fed a high fat diet (HFD) to induce a type 2 diabetic-like phenotype while low fat diet (LFD) animals served as controls. Endothelial cells (ECs) were isolated from the lungs (LECs) and bone marrow (BMECs) 3 weeks post-surgery, and the fractured femurs were also examined. Our studies demonstrate that local administration of BMP-2 at the fracture site in a CSD model results in complete bone healing within 3 weeks for all HFD mice and 66.7% of LFD mice, whereas those treated with saline remain unhealed. At the fracture site, vessel parameters and adipocyte numbers were significantly increased in BMP-2 treated femurs, irrespective of diet. At distal sites, LEC and BMEC proliferation was not altered by diet or BMP-2 treatment. HFD increased the tube formation ability of both LECs and BMECs. Interestingly, BMP-2 treatment at the time of surgery reduced tube formation in LECs and humeri BMECs. However, migration of BMECs from HFD mice treated with BMP-2 was increased compared to BMECs from HFD mice treated with saline. BMP-2 treatment significantly increased the expression of CD31, FLT-1, and ANGPT2 in LECs and BMECs in LFD mice but reduced the expression of these same genes in HFD mice. To date, this is the first study that depicts the systemic influence of fracture surgery and local BMP-2 treatment on the proliferation and angiogenic potential of ECs derived from the bone marrow and lungs.