Ceramiclike xenogeneic bone (CXB) was obtained from the fresh bone of pig ribs being treated by physical and chemical methods to deprive of its organic substance. The CXB possessed the same natural porous network system as that of the human. The CXB was cultured with the bone marrow stromal cells of rabit. When the marrow cells had integrated with the CXB, thus a new material was obtained. (CXB-BM), and was implanted sacro-spinal muscle of rabbit. The specimens were observed under phase microscope, light microscope and electronic scanning microscope. The results showed that: at the 2nd week after the implantation of CBX-BM composite material there began the new bone formation, and the rate of bone formation was increased with time. There was evident new bone formation after 24 weeks. The process of the new bone formation were quite similar to the composite graft of HAP red autogenous and marrow, but the former degraded faster and formed typical cancellous structure earlier. There was no new bone formation when CXB was implanted alone in the control. Both the mechanism of osteogenetic potential and its clinical application were discussed.