1. This paper reports a histological study of the fate of sheep and calf cancellous bone grafts impregnated with autologous red marrow of Wistar rats and implanted intramuscularly as composite xenograft-autografts for two to twelve weeks. It also includes some biochemical estimations of certain types of sheep and calf bone used to prepare these composite grafts.

2. Only one of 223 devitalised bone xenografts implanted without autologous marrow formed new bone; in contrast 216 of 223 transplanted with marrow formed new bone.

3. The new bone formed by the composite grafts is derived from the autologous marrow. There was no evidence for an inductive effect upon the marrow of the various types of xenograft bone studied as described previously for allograft bone (Burwell 1966).

4. The highest score of new bone formation was found in composite grafts based on fully deproteinised sheep iliac bone prepared at Oswestry. Statistically this score was significantly higher than those registered by composite grafts prepared from intact (frozen and freeze-dried), decalcified (frozen and freeze-dried) and Kiel sheep bone, and by Kiel and Oswestry calf bone (Table II).

5. The histological evidence reported suggests that the high score with the sheep Oswestry composite grafts is because Oswestry bone is feebly immunogenic, if at all; and that such feeble or absent immunogenicity permits more marrow cells to differentiate into osteoblasts and lay down new bone without impediment.

6. The lower scores of new bone formation in most of the undeproteinised composite grafts of sheep origin–intact frozen, intact freeze-dried and Kiel–are attributed to residual immunogenicity within the organic material of the donor bone, because each type evoked the formation of mature plasma cells.

7. The Kiel bone grafts appeared to evoke less of a plasma cell reaction and may be less immunogenic than the intact and decalcified bone xenografts.

8. The sheep Oswestry CXA's formed significantly more new bone than did the calf Oswestry CXA's. This difference may be due to the different physical properties of the bone obtained from old sheep compared with the bone obtained from a young calf.