A hydroxyapatite/type I collagen(HAp/Col) composite, in which the hydroxyapatite nanocrystals align along the collagen molecules, has been prepared. The bio-compatibility, osteoconductive activity and efficacy as a carrier of rhBMP-2 of this novel biomaterial were examined. Following three studies were performed – (1) The composite materials (4×4×1mm3) were implanted in the back of Wistar rats, and specimens collected for histological observations until week 24. (2) The composite materials (5×5×10mm3) containing rhBMP-2(0, 200, 400μg/ml) were grafted in radii and ulnae in beagle dogs. X-ray images were prepared, and specimens collected for histological observation at week 8 and 12. (3) The implants(15mm in diameter and 20mm in length) containing rhBMP-2 (0, 400 mg/ml) were implanted in tibiae in beagle dogs and fixed with Ilizarov method. Soft x-ray images were prepared each week. The bone mineral density was measured and the implants were harvested at 12, 18 and 24 weeks after surgery. The period until bone union after implantation of the HAp/Col implant was between 10 and 12 weeks after operation, and approximately the same as that of autogenous bone graft. Histological analysis revealed that osteoclasts appeared in a Howship’s lacunae-like structure formed on the composite and osteoblasts arranged on the newly formed bone. These findings suggest that the HAp/Col composite has a character similar to that of natural bone. X-ray images and histological findings for the composites support the idea that HAp/Col has a high osteoconductive activity and is able to induce bone-remodeling units. In cases where the implants are grafted at weight bearing sites, treatment with rhBMP(400μg/ml) may be useful to shorten the time until bone union.