To improve ostegenic healing efficiency by demineralized bone matrix, we evaluated the ectopic bone formation induced by variously demineralized allogenic cortical bone matrices at subcutaneous and muscular sites in rats. The rat tubular cortical bone matrices were demineralized in heated 0.6N HCl at 60 °C for 5 and 20 mins, respectively, using a controlledheat ultrasonic cleaner and implanted in rat dorsal subcutaneous pouches and thigh muscles for 1-3 weeks. The influence of the demineralized condition of bone matrix on cellular proliferation and osteogenic differentiation was also evaluated in vitro by MTT assay and ALP staining. The cortical matrices were completely demineralized within 20 mins by sonication and heating of diluted 0.6 N HCl. The sonicated bone matrices in heated acidic solution at 60 °C revealed no adverse immunogenic and inflammatory response in vivo regardless of demineralized condition. Cellular proliferation and osteoblastic differentiation was facilitated by more fully demineralized. Ectopic bone formation was induced only by demineralized bone matrices and were more favorable in fully demineralized matrices. The ectopic bone induction was more favorably in subcutaneous pouches than in muscular tissue. These findings suggest that a fully demineralized cortical bone matrix maximizes osteogenic repair by exposing more bioactive molecules which in turn induce chondro- and osteognic differentiation of mesenchymal cells around the implanted matrices, and that the sonication of diluted 0.6 N HCl heated at 60 ° C is a rapid and effective method for sterile demineralized graft preparation.