The tissue response to a nano-hydroxyapatite/collagen composite implanted in a marrow cavity was investigated by histology and scanning electron microscopy. A Knoop microhardness test was performed to compare the mechanical behavior of the composite and bone. The ultrastructural features of the composite, especially the carbonate-substituted hydroxyapatite with low crystallinity and nanometer size, made it a bone-resembling material. It was bioactive, as well as biodegradable. At the interface of the implant and marrow tissue, solution-mediated dissolution and giant cell mediated resorption led to the degradation of the composite. Interfacial bone formation by osteoblasts was also evident. The process of implant degradation and bone substitution was reminiscent of bone remodeling. The composite can be incorporated into bone metabolism instead of being a permanent implant. For lack of the hierarchical organization similar to that of bone, the composite exhibited an isotropic mechanical behavior. However, the resistance of the composite to localized pressure could reach the lower limit of that of the femur compacta. (C) 1998 John Wiley & Sons, Inc.