Osteoinductivity of demineralized bone matrix has been attributed to bone morphogenetic proteins (BMP). Other growth factors, including insulin-like growth factor-1 (IGF-1) and transforming growth factor-beta1 (TGF-beta1), have also been detected in demineralized bone matrix. Success of bone graft substitutes containing demineralized bone matrix has been assumed to be closely associated with osteoinductivity of the demineralized bone matrix. Because of differences in bone characteristics between donors and tissue banks, confirmation and measurement of osteoinductivity may play a crucial role in predicting the success of the bone graft substitute. In the current studies, BMP-2, BMP-4, TGF-beta1, and IGF-1 were measured in demineralized bone matrix. A strong association was noted between BMP-2 and TGF-beta1 levels. A strong association was also found between BMP-2 and new bone formation in an ectopic nude rat model.