To examine whether or not transplanted bone pieces have an enhancing effect on bone regeneration by the periosteum, the author observed the process of bone formation after transplanting self bone pieces into the artificial periostal cavity made by removing mandibular bone from rabbits. The animals were sacrificed 3, 7, 10, 14, 21, 30, 60 and 90 days after bone piece transplantation; the cavities were excised, and the bone formation in fresh tissues was observed by roentgenography and by light microscopy in fixed tissue sections stained with hematoxylin and eosin. Much more enhanced bone formation in the cavities having bone pieces was observed than in those having no bone pieces. Active proliferation of chondrocytes was observed around the transplanted bone pieces followed by bone formation, while the chondrogenesis was rather poor in periosteal osteogenesis without transplantation. Diffuse bone formation was observed in the periosteal cavities having bone pieces, in which osteogenesis proceeded from the marginal zone of the periosteum, hardly filled the central area of the cavities.