Demineralized bone matrix and bone-matrix gelatin prepared from cortical rat bone, and from cortical and cancellous canine bone were implanted into muscle pouches of nude rats for 6 weeks. Evaluation was done by histology, histomorphometry, and determination of alkaline phosphatase. Rat matrix consistently induced new bone and high phosphatase levels. Canine matrix induced but small amounts of bone and lower phosphatase levels, with cortical matrix somewhat more inductive than cancellous matrix; demineralized cancellous bone matrix from the dog was the only material tested not showing any inductivity. Irrespective of bone type or species, gelatin had clearly higher induction capacity than demineralized bone matrix.