Five osteosarcomas and two chondrosarcomas were microdissected to separate tumor compartments of calcified, chondrous, and connective tissue. The compartments were lyophilized separately and transplanted subcutaneously or intramuscularly into nude mice for three, four, and five weeks, respectively. In three of the osteosarcomas and in one of the chrondrosarcomas, calcified tissue induced ectopic bone formation by the host, while cartilaginous tissue induced ectopic bone formation in one of the osteosarcomas and in one of the chondrosarcomas. The tumor-derived connective tissue did not induce osteogenic response in the host tissue. Thus, the ability to develop an osteoinductive response and to produce bone morphogenetic protein seems to be restricted to the population of cells that eventually will, or have, differentiated into bone or cartilage.