It has been shown that different sterilization procedures of demineralized bone may influence its osteoinductive properties. The aim of this study was to evaluate the effect of ethylene oxide sterilization for 1, 3, and 6 hours on the osteoinductive potential of allogeneic demineralized bone implanted heterotopically in rats. Sixty male Wistar rats were randomly assigned to one of four groups, A through D, and four demineralized bone chips (2.8 mg) were implanted in a pouch created between the right oblique abdominal muscles in each animal. In Group A, the demineralized bone was implanted without prior sterilization of the material, whereas the demineralized bone implanted in Groups B, C, and D had been sterilized in ethylene oxide gas for 1, 3, or 6 hours, respectively, and aerated for 48 hours. At 4 weeks postoperatively, bone formation was evaluated quantitatively by strontium 85 uptake and qualitatively by light microscopy of histological sections. One-way analyses of variance at the 0.05 level revealed no significant difference in strontium 85 uptake of the different groups, and no qualitative differences in osteoinduction could be detected by light microscopy. Ossicles consisting of bone and bone marrow were seen in the recovered implants of all groups.