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Abstract Despite decades of progress, developing minimally invasive bone‐specific drug delivery systems (DDS) to improve fracture healing remains a significant clinical challenge. To address this critical therapeutic need, nanoparticle (NP) DDS comprised of poly(styrene‐alt‐maleic anhydride)‐b‐poly(styrene) (PSMA‐b‐PS) functionalized with a peptide that targets tartrate‐resistant acid phosphatase (TRAP) and achieves preferential fracture accumulation has been developed. The delivery of AR28, a glycogen synthase kinase‐3 beta (GSK3β) inhibitor, via the TRAP binding peptide‐NP (TBP‐NP) expedites fracture healing. Interestingly, however, NPs are predominantly taken up by fracture‐associated macrophages rather than cells typically associated with fracture healing. Therefore, the underlying mechanism of healing via TBP‐NP is comprehensively investigated herein. TBP‐NP_AR28promotes M2 macrophage polarization and enhances osteogenesis in preosteoblast‐macrophage co‐cultures in vitro. Longitudinal analysis of TBP‐NP_AR28‐mediated fracture healing reveals distinct spatial distributions of M2 macrophages, an increased M2/M1 ratio, and upregulation of anti‐inflammatory and downregulated pro‐inflammatory genes compared to controls. This work demonstrates the underlying therapeutic mechanism of bone‐targeted NP DDS, which leverages macrophages as druggable targets and modulates M2 macrophage polarization to enhance fracture healing, highlighting the therapeutic benefit of this approach for fractures and bone‐associated diseases.