Bone lengthening using the process of corticotomy and gradual distraction of callus is applicable to the membranous bone of the canine mandible. In this study the precursors to bone formation, in the area between the distracted bone edges, are analyzed in an attempt to determine the mechanism of bone formation. Ten mongrel dogs 5 months of age were studied. A unilateral, periosteal-preserving angular corticotomy was performed, and an external bone-lengthening device was fixed to the mandible. After 10 days of external fixation, the mandible was lengthened 1 ml per day for 20 days and then held in external fixation for 8 weeks. The dogs were killed for histological and microradiographic study at 10 and 20 days of distraction, and at 14, 28, and 56 days after the completion of distraction. It was observed that the gap between the distracted bone edges is first occupied by fibrous tissue. As distraction proceeds, the fibrous tissue becomes longitudinally oriented in the direction of distraction. Early bone formation advances along the fibrous tissue, starting from the cut bone ends. Eventually the area is converted to mature cortical bone. Bone is formed predominantly by intramembranous ossification. This mechanism is similar to that of bone formation during long bone lengthening.