Abstract This application proposes to address one of the major translational limitations of using Bone Morphogenetic Proteins (BMPs) for local bone induction in spine fusion. Since the FDA approval of recombinant human BMP- 2, it has consistently induced bone formation in widespread clinical use, but also has been associated with several local side effects including inflammation, vascular permeability, seromas, hematomas, and nerve root irritation. Our overall strategy is to locally inhibit the primary natural BMP antagonist, noggin, creating a BMP- privileged zone that allows for lower BMP levels to induce bone formation. We propose to engineer a hybrid scaffold combining a collagen sponge and a poly(lactic-co-glycolic acid) (PLGA) or a nanostructured mineral coating to deliver a novel small molecule that blocks noggin activity. In compelling preliminary data from rabbit spine fusion studies, we show a significant increase in noggin production in surrounding soft tissue, an auto- induction of local BMP-2 production in the fusion site, and a subsequent increase in noggin production in the fusion site. To blunt the noggin negative feedback loop, we computationally designed a novel Small Molecule Inhibitor (SMI) of noggin that blocks its binding to BMP-2 and enhances activity of exogenous and endogenous BMPs. To provide spatiotemporal control of the noggin SMI, we engineered a hybrid collagen scaffold with either a nanostructured mineral or a PLGA coating. This innovative noggin SMI strategy will allow lower BMP levels to locally induce bone formation through enhanced cellular responsiveness. We hypothesize that locally blocking the activity of noggin will disrupt/uncouple the negative feedback loop and allow the positive feedback loop to prevail, thereby resulting in greater signal amplification of BMP-2 within the delivery scaffold. We propose the following Specific Aims: Aim 1: To determine the noggin SMI to BMP-2 ratio and dose windows to maximize the positive and minimize the negative BMP feedback signaling loops in vitro and osteogenesis in vivo. Aim 2: To engineer a hybrid biomaterial delivery system to control spatial and temporal release of the noggin SMI to potentiate BMP-2 responsiveness. Aim 3: To demonstrate that a hybrid noggin SMI scaffold can lower the dose of BMP-2 required to produce spine fusion. The potential impact of a decreased BMP dose is substantial for improving the safety of activating the BMP signaling pathway for spinal fusion clinically.