The problems arising from the transplantation of autogenic and allogenic bone have significantly limited the use of these methods. Hence, there is an ever increasing demand for suitable transplant materials that could be readily available to orthopaedic surgeons throughout the country. Although the advantages of demineralized bone matrix over allogenic cancellous bone have been shown in numerous experimental studies, its broad clinical application has so far been limited. The purpose of this study was to investigate the osteogenic properties of partially demineralized bone matrix in clinically relevant and realistic conditions. Tibial defects 5 cm in length in 24 merino sheep were bridged by way of medullary nailing and filled with various preparations of bone matrix. Cortical bone displaying poor vascularization and rotation instability of the osteosynthesis ensured extremely difficult testing conditions for the transplant. Postoperatively, the extent of new bone formation was evaluated by means of regular X-ray examinations over a period of 12-20 weeks. In addition, histological, fluorescent-optical and microradiographic examinations of the final specimen were carried out. Good new bone formation regularly followed the transplantation of partially demineralized bone matrix with a particle size of 750 microns. Complete bridging of the defect was achieved when small amounts of bone marrow were added. The use of bone matrix with a smaller or larger particle size did not influence the rate of new bone formation perceptibly.