To investigate the osteogenic capacity of vascularized periosteum in bore grafting, we prepared experimental groups by wrapping beta-tricalcium phosphate (beta-TCP) with vascularized periosteum of the femur of 12-week-old Japanese white rabbits, and evaluated osteogenesis histologically and biochemically. Bone formation was observed in the group with vascularized periosteum and in the group with bone marrow fluid added to the vascularized periosteum. In particular, woven bone was observed in the group that had added bone marrow. Osteogenesis appeared earlier in the group with bone marrow fluid added to the vascularized periosteum, but histologically, there was no significant difference between this group and the group with vascularized periosteum without bone marrow fluid added at week 24 after the operation. In the group with non-vascularized periosteum, slight osteogenesis was found at week 6 after the operation, but in the control group, with beta-TCP implanted in soft tissue, osteogenesis did not occur at all. Alkaline phosphatase (ALP) activity reached a peak at week 2 after the operation in the group with vascularized periosteum, but only half the peak value was then maintained until week 8. In the group with bone marrow fluid added to the vascularized periosteum, similar values were found from immediately after the operation until week 8. ALP activity did not show any significant difference between these two groups at week 8 postoperatively. In the group with beta-TCP implanted in the soft tissue, ALP activity was low at all times measured. These results suggested that the periosteum had osteoinduction capacity and beta-TCP had osteoconduction capacity; that better osteogenesis occurred with vascularized periosteum; and that bone marrow fluid was involved in the promotion of osteoblastic activity, but not in calcification.