Articular cartilage repair remains a major obstacle in tissue engineering. In the present study, we investigated the potential for demineralized dentin matrix (DDM; organic material derived from dentin) obtained from extracted teeth to be used as bone graft material. To evaluate the extent to which DDM induces osteochondral regeneration, we implanted DDM from bovine teeth in rabbit knees with full-thickness articular cartilage defects. Thirty-three 13-week-old male rabbits weighing 2.5–3.0 kg were randomly assigned to a control group (n = 11) and two experimental groups (n = 11 for each group). The knees were divided into three groups according to the subsequent treatment: in group I (n = 22), the control group, the defect was left untreated; and in groups II (n = 22) and III (n = 22), 50 and 100 mg of DDM, respectively, was implanted. The rabbits were killed 1, 3, 6, or 9 weeks after the surgical procedure, and the knees were collected. The harvested tissues were examined radiographically and histologically. The 100-mg DDM group (group III) had significantly more new bone forming inside the defect (as measured using the BV/TV value) compared with the other two groups as early as at week 3 postoperatively, but thereafter, the difference gradually decreased. Cartilage repair in the surface region remained significantly better in group III because hyaline-like cartilage appeared in the peripheral area of the defect at week 6 and the surface was covered with hyaline-like cartilage with a thickness similar to that of normal cartilage at week 9. In conclusion, the results of this study suggest that DDM acts as a scaffold for osteochondral regeneration, yielding active new bone formation early in the postoperative period. Thus, DDM may represent an effective bone implant material.