The repair of craniofacial bone defects is surgically challenging due to the complex anatomical structure of the craniofacial skeleton. Current strategies for bone tissue engineering using a preformed scaffold have not resulted in the expected clinical regeneration due to difficulty in seeding cells into the deep internal space of scaffold, and the inability to inject them in minimally invasive surgeries. In this study, we used the osteoconductive and mechanical properties of nano-scale calcium sulfate (nCS) and the biocompatibility of alginate to develop the injectable nCS/alginate (nCS/A) paste, and characterized the effect of this nCS/A paste loaded with bone morphogenetic protein 2 (BMP2) gene-modified rat mesenchymal stem cells (MSCs) on bone and blood vessel growth. Our results showed that the nCS/A paste was injectable under small injection forces. The mechanical properties of the nCS/A paste were increased with an increased proportion of alginate. MSCs maintained their viability after the injection, and MSCs and BMP2 gene-modified MSCs in the injectable pastes remained viable, osteodifferentiated, and yielded high alkaline phosphatase activity. By testing the ability of this injectable paste and BMP2-gene-modified MSCs for the repair of critical-sized calvarial bone defects in a rat model, we found that BMP2-gene-modified MSCs in nCS/A (nCS/A+M/B2) showed robust osteogenic activity, which resulted in consistent bone bridging of the bone defects. The vessel density in nCS/A+M/B2 was significantly higher than that in the groups of blank control, nCS/A alone, and nCS/A mixed with MSCs (nCS/A+M). These results indicate that BMP2 promotes MSCs-mediated bone formation and vascularization in nCS/A paste. Overall, the results demonstrated that the combination of injectable nCS/A paste and BMP2-gene-modified MSCs is a new and effective strategy for the repair of bone defects.