Histologic changes of muscle tissue in the early stage of heterotopic osteogenesis induced by syngeneic insoluble bone matrix gelatin (BMG) with bone morphogenetic protein in rats was observed by light and electron microscopy. BMG induced cartilage in muscle tissue by Day 7 after its implantation, woven bone by Day 10, and lamellar bone with bone marrow by Day 14. The new findings in this work include (1) the disappearance of the basement membrane of muscle fibers; (2) the activation of the satellite cells of muscle fibers; (3) the appearance of fibroblastlike cells that closely resembled activated satellite cells among the degenerated muscle fibers or on the surface of the BMG; and (4) the change of fibroblastlike cells to chondroblasts or osteoblasts. These findings suggest that intramuscular implantation of BMG caused the conspicuous disappearance of the basement membrane of the muscle fiber and may play a part in osteogenesis induced by BMG.