An injectable, hard-setting, calcium sulfate-based putty containing demineralized bone matrix particles (AlloMatrix II, Wright Medical Technology, Inc, Arlington, Tenn) was compared to autogenous cancellous bone graft to evaluate healing in a canine model. Area fraction of new bone, modulus of elasticity, and compressive strength of new bone were evaluated, as was radiographic and histologic healing. Bilateral defects were created in the proximal humeri, and each defect was implanted with either the putty or autogenous bone according to a randomized schedule. Dogs were euthanized at 6, 13, and 26 weeks. The area fraction, modulus of elasticity, and compressive strength of newly formed bone was not significantly different between the putty and autogenous bone at 6, 13, or 26 weeks. The putty had excellent handling characteristics, was biocompatible, and was as effective as autograft bone in achieving near complete bony restoration of a large, critical-sized defect.