Wandering histiocytes, foreign body giant cells, and inflammatory connective-tissue cells are stimulated by degradation products of dead matrix to grow in and repopulate the area of an implant of decalcified bone. Histiocytes are more numerous than any other cell form and may transfer collagenolytic activity to the substrate to cause dissolution of the matrix. The process is followed immediately by new-bone formation by autoinduction in which both the inductor cells and the induced cells are derived from ingrowing cells of the host bed. The inductor cell is a descendant of a wandering histiocyte; the induced cell is a fixed histiocyte or perivascular young connective-tissue cell. Differentiation of the osteoprogenitor cell is elicited by local alterations in cell metabolic cycles that are as yet uncharacterized.