Vessel invasion is an important step in cartilage replacement that leads to bone formation, and vascular endothelial growth factor (VEGF) has been implicated as a key player in this process. Although grafted periosteum undergoes endochondral ossification, little is known about the role of VEGF in this process. In the current study the authors investigated by immunohistochemical, histochemical, and ultrastructural techniques the localization of VEGF during bone formation in periosteal grafts. At day 14 after grafting the tibias of Japanese white rabbits, periosteal cells in the grafted tissue had differentiated into chondrocytes to form cartilage. Some chondrocytes were immunopositive for VEGF expression, and subsequent vessel invasion occurred predominantly in these VEGF-positive areas. At day 45, the cartilage invaded by blood vessels had been replaced by newly formed bone. These findings suggest that VEGF is associated with the process of blood vessel invasion into cartilage before bone replacement in endochondral ossification from grafted periosteum.