Bone morphogenetic protein (BMP) has been reported to cause early inflammatory changes, ectopic bony formation, adjacent level fusion, radiculitis, and osteolysis. The authors describe the case of a patient who developed inflammatory fibroblastic cyst formation around the BMP sponge after a lumbar fusion, resulting in compressive lumbar radiculopathy. A 70-year-old woman presented with left L-4 and L-5 radiculopathy caused by a Grade I spondylolisthesis with a left herniated disc at L4-5. She underwent a minimally invasive transforaminal lumbar interbody fusion with BMP packed into the interbody cage at L4-5. Her neurological symptoms resolved immediately postoperatively. Six weeks later, the patient developed recurrence of radiculopathy. Radiological imaging demonstrated an intraspinal cyst with a fluid-fluid level causing compression of the left L-4 and L-5 nerve roots. Reexpoloration of the fusion was performed, and a cyst arising from the posterior aspect of the cage was found to compress the axilla of the left L-4 nerve root and the shoulder of the L-5 nerve root. The cyst was decompressed, and the wall was partially excised. A collagen BMP sponge was found within the cyst and was removed. Postoperatively, the patient's radiculopathy resolved and she went on to achieve interbody fusion. Bone morphogenetic protein can be associated with inflammatory cyst formation resulting in neural compression. Spine surgeons should be aware of this complication in addition to the other reported BMP-related complications.