The ability to create bone from periosteum and biodegradable polymer may have significant utility in reconstructive orthopedic and plastic surgery. Polyglycolic acid (PGA) serves as a biodegradable matrix which can be configured to a desirable shape and structure. This study was conducted to generate new bone tissue from periosteum and PGA polymer and to compare the tissue to the bone tissue generated from periosteal cells seeded onto PGA polymer. Bovine periosteum, harvested from fresh calf limbs, was placed either directly onto PGA polymer (1 cm2) or onto tissue culture dishes for periosteal cell isolation. In Medium 199 media with antibiotics and ascorbic acid, the periosteum/PGA construct was cultured for one week, then implanted into the dorsal subcutaneous space of nude mice. Periosteal cells, cultured from pieces of periosteum for two weeks, were isolated into cell suspension and seeded (˜l-3× 107 cells) onto PGA polymer (1 cm2); after one week in culture, the periosteal cell-seeded polymer was implanted into the subcutaneous space of athymic mice. Specimens, harvested at 4, 8, and 14 week intervals, were evaluated grossly and histologically. The periosteum/PGA constructs showed an organized cartilage matrix with early evidence of bone formation at 4 weeks, a mixture of bone and cartilage at 8 weeks, and a complete bone matrix at 14 weeks. Constructs created from periosteal cells seeded onto polymer showed presence of disorganized cartilage at 4 and 8 weeks, and a mixture of bone and cartilage at 14 weeks. Periosteum placed directly onto polymer will form an organized cartilage and bone matrix earlier than constructs formed from periosteal cell-seeded polymer. This data suggests that PGA is an effective scaffold for periosteal cell attachment and migration to produce bone which may offer new approaches to reconstructive surgery.