Corticosteroids are prescribed for the treatment of many medical conditions and their adverse effects on bone, including steroid-associated osteoporosis and osteonecrosis, are well documented. Core decompression is performed to treat osteonecrosis, but the results are variable. As steroids may affect bone turnover, this study was designed to investigate bone healing within a bone tunnel after core decompression in an experimental model of steroid-associated osteonecrosis. A total of five 28-week-old New Zealand rabbits were used to establish a model of steroid-induced osteonecrosis and another five rabbits served as controls. Two weeks after the induction of osteonecrosis, core decompression was performed by creating a bone tunnel 3 mm in diameter in both distal femora of each rabbit in both the experimental osteonecrosis and control groups. An In the osteonecrosis group all measurements of bone healing and maturation were lower compared with the control group. Impaired osteogenesis and remodelling within the bone tunnel was demonstrated in the steroid-induced osteonecrosis, accompanied by inferior mechanical properties of the bone. We have confirmed impaired bone healing in a model of bone defects in rabbits with pulsed administration of corticosteroids. This finding may be important in the development of strategies for treatment to improve the prognosis of fracture healing or the repair of bone defects in patients receiving steroid treatment.