Bone graft substitutes have become an essential component in a number of orthopedic applications. Autologous bone has long been the gold standard for bone void fillers. However, the limited supply and morbidity associated with using autologous graft material has led to the development of many different bone graft substitutes. Allogeneic demineralized bone matrix (DBM) has been used extensively to supplement autograft bone because of its inherent osteoconductive and osteoinductive properties. Synthetic and natural bone graft substitutes that do not contain growth factors are considered to be osteoconductive only. Bioactive glass has been shown to facilitate graft containment at the operative site as well as activate cellular osteogenesis. In the present study, we present the results of a comprehensive in vitro and in vivo characterization of a combination of allogeneic human bone and bioactive glass bone void filler, NanoFUSE(®) DBM. NanoFUSE(®) DBM is shown to be biocompatible in a number of different assays and has been cleared by the FDA for use in bone filling indications. Data are presented showing the ability of the material to support cell attachment and proliferation on the material thereby demonstrating the osteoconductive nature of the material. NanoFUSE(®) DBM was also shown to be osteoinductive in the mouse thigh muscle model. These data demonstrate that the DBM and bioactive glass combination, NanoFUSE(®) DBM, could be an effective bone graft substitute.