Bone allograft processing often includes treatment with hydrogen peroxide for protein denaturation and sterilization by irradiation or ethylene oxide. The effect of these treatments on the osteoconductive properties of the graft was tested by measuring the new bone ingrowth distance into processed cancellous bone grafts in rats. Forty graft pairs were taken from rat tibias, and were frozen, defatted in chloroform-methanol, and dried. In addition, 1 graft of each pair was treated with 2% hydrogen peroxide, 2.5 Mrad irradiation, or by a Steri-Vac hospital ethylene oxide chamber. The grafts were placed in bone conduction chambers and implanted in rat tibias. Six weeks after implantation, the chambers were emptied, and the new bone ingrowth distance and scintimetric activity were measured. Ethylene oxide treatment impaired the new bone ingrowth distance by 68% and reduced the scintimetric activity by 51%. Another 10 defatted grafts, which had been ethylene oxide treated together with the grafts for implantation, were analyzed for levels of residual ethylene oxide, ethylene chlorohydrin, and ethylene glycol. All the measured residuals were below the detection limit of 20 parts per million, which was below the level recommended by the United States Food and Drug Administration. Ethylene oxide sterilization was more deleterious for bone allografts than expected.