The aim of this study was to examine the osteogenic potential of demineralized bone matrix prepared from intramembranous bone (DBMIM) and to examine its effects on the healing of endochondral autogenous bone grafts. Twenty-four defects in 24 New Zealand white rabbits were used as experimental groups. Twelve defects were grafted with endochondral bone, and the other 12 defects were grafted with endochondral bone with DBMIM (EC-DBMIM). One rabbit from each group was sacrificed on days 1, 2, 3, 4, 5, 6, and 7 postgrafting, and the remaining 5 rabbits from each group were sacrificed on day 14 postgrafting. Another 8 defects in 4 rabbits were used as control groups: 4 defects were left empty (passive control), and 4 defects were grafted with rabbit skin collagen (positive control). They were all sacrificed at 14 days after grafting. Serial sections were made across the whole defect. Quantitative analysis was performed on 100 sections of the 14-day experimental groups by image analysis. Four hundred fourteen percent more new bone was formed in defects grafted with composite EC-DBMIM than in those grafted with endochondral bone alone (P < 0.0001). No bone was formed in either passive or positive controls. Histologic examination of the bone grafts revealed intermediate-stage cartilage, and immunohistochemical examination revealed earlier vascularization in the composite EC-DBMIM groups. In conclusion, DBMIM has extremely high osteoinductive properties and greatly enhances the integration of endochondral bone with defects of intramembranous bone in origin.