Cancellous allograft bone chips are commonly used in the reconstruction of defects in bone after removal of benign tumours. We investigated the MRI features of grafted bone chips and their change over time, and compared them with those with recurrent tumour. We retrospectively reviewed 66 post-operative MRIs from 34 patients who had undergone curettage and grafting with cancellous bone chips to fill the defect after excision of a tumour. All grafts showed consistent features at least six months after grafting: homogeneous intermediate or low signal intensities with or without scattered hyperintense foci (speckled hyperintensities) on T1 images; high signal intensities with scattered hypointense foci (speckled hypointensities) on T2 images, and peripheral rim enhancement with or without central heterogeneous enhancements on enhanced images. Incorporation of the graft occurred from the periphery to the centre, and was completed within three years. Recurrent lesions consistently showed the same signal intensities as those of pre-operative MRIs of the primary lesions. There were four misdiagnoses, three of which were chondroid tumours. We identified typical MRI features and clarified the incorporation process of grafted cancellous allograft bone chips. The most important characteristics of recurrent tumours were that they showed the same signal intensities as the primary tumours. It might sometimes be difficult to differentiate grafted cancellous allograft bone chips from a recurrent chondroid tumour. Cite this article: Bone Joint J 2015;97-B:121–8