Angiogenesis and osteogenesis are essential for healing bone injuries, especially those related to critically sized bone defect (CSBD). Bone tissue engineering is a promising method for repairing bone defect, but the inherently poor nutrient supply and the slow osteogenesis of large size defect are two obstacles. This leads to an urgent need to understand how to orchestrate angiogenesis and osteogenesis for promoting bone defect healing. In this article, poly-L-lysine-coated vascular endothelial growth factor/alginate controlled releasing microspheres (VEGF-AG-PLL) were fabricated in tissue-engineered bone (TEB), and then the composite was implanted into the CSBD of goat femurs. Dynamic intramedullary rod was utilized to fixate the femur and produce an analogous physiological axial compression. We found that VEGF released in early stage not only promoted angiogenesis, but also brought benefit to osteogenesis. Meanwhile, in early stage physiological axial compression could regulate angiogenesis and facilitate VEGF release from the composite. In later stage, compression could accelerate reconstruction of TEB. In conclusion, this study demonstrated that the collaborative application of VEGF and compression could accelerate the reconstruction of TEB; thus, providing a new strategy for clinically repairing large bone defect in future.