The role of glycosaminoglycans (GAGs) in modulating bone morphogenetic protein (BMP) signaling represents a recent and underexplored area. Conflicting reports suggest a dual effect: some indicate a positive influence, while others demonstrate a negative impact. This duality suggests that the localization of GAGs (either at the cell surface or within the extracellular matrix) or the specific type of GAG may dictate their signaling role. The precise sulfation patterns of heparan sulfate (HS) responsible for BMP2 binding remain elusive. BMP2 exhibits a preference for binding to HS over other GAGs. Using well-characterized biomaterials mimicking the extracellular matrix, our research reveals that HS promotes BMP2 signaling in the extracellular space, contrary to chondroitin sulfate (CS), which enhances BMP2 bioactivity at the cell surface. Further observations indicate that a central IdoA (2S)-GlcNS (6S) tri-sulfated motif within HS hexasaccharides enhances binding. Nevertheless, BMP2 exhibits a degree of adaptability to various HS sulfation types and sequences. Molecular dynamic simulations attribute this adaptability to the BMP2 N-terminal end flexibility. Our findings illustrate the complex interplay between GAGs and BMP signaling, highlighting the importance of localization and specific sulfation patterns. This understanding has implications for the development of biomaterials with tailored properties for therapeutic applications targeting BMP signaling pathways.