We studied the effect of demineralized allogenic and heterogenic bone matrix on the repair of large segmental defect in the diaphysis of the radius of rabbits. Heterogenic bone matrix experiments were divided by three groups:as group I, human osteosarcoma matrix;group II, human tibial cortical bone matrix, and group III, human osteosarcoma matrix which had been treated with adjuvant chemotherapy. The group IV consisted of demineralized allogenic bone matrix transplanted one. The effect of demineralized bone matrix on repair was then assessed by serial radiographies, histology, and biomechanical studies. By twelve weeks, the defects that had been treated with demineralized allogenic bone matrix (groupIV) showed satisfactory repair in all 8 animals based on radiographic evaluation. But six of 8 in group I, four of 7 in group II and four of 8 in group III showed satisfactory repair. On histologic exmination demineralized allogenic bone matrix was surrounded by connective tissue, and cartilage began to appear in the second week of implantation. Enchondral ossification and new bone formation started to appear in fourth week and progressive ossification followed. Demineralized heterogenic bone matrix showed similar new bone inducing process with thst of allogenic matrix but surrounding connective tissue had abandunt inflammatory cells and also foreign body giant cells. The osteoinductive process seemed to be slightly delayed compared to that of allogenic matrix but no significant difference was noticed between group I, II and III. The biomechanical studies demonstrated that the bone induced by allogenic bone matrix had much higher maximal torque (three times) and energy-absorption capacity (two times) than that of heterogenic bone matrices. Between three heterogenic bone matrices, the group I showed much higher strength of maximal torque (two times) and energy-absorption capacity (1.5 times) compared to that of group II and III, but there were no differences between group II and III.