Bone defects caused by osteoporosis, infection, diabetes, post-tumor resection, and nonunion often cause severe pain and markedly increase morbidity and mortality, which remain a significant challenge for orthopedic surgeons. The precise local treatments for these pathological complications are essential to avoid poor or failed bone repair. Hydrogel formulations serve as injectable innovative platforms that overcome microenvironmental obstacles and as delivery systems for controlled release of various bioactive substances to bone defects in a targeted manner. Additionally, hydrogel formulations can be tailored for specific mechanical strengths and degradation profiles by adjusting their physical and chemical properties, which are crucial for prolonged drug retention and effective bone repair. This review summarizes recent advances in bioactive hydrogel formulations as three-dimensional scaffolds that support cell proliferation and differentiation. It also highlights their role as smart drug-delivery systems with capable of continuously releasing antibacterial agents, anti-inflammatory drugs, chemotherapeutic agents, and osteogenesis-related factors to enhance bone regeneration in pathological areas. Furthermore, the limitations of hydrogel formulations in pathological bone repair are discussed, and future development directions are proposed, which is expected to pave the way for the repair of pathological bone defects.