Current immunological issues in bone grafting regarding the transfer of xenogeneic donor bone cells into the recipient are challenging the industry to produce safer acellular natural matrices for bone regeneration. The aim of this study was to investigate the efficacy of a novel decellularization technique for producing bovine cancellous bone scaffold and compare its physicochemical, mechanical, and biological characteristics with demineralized cancellous bone scaffold in an in-vitro study. Cancellous bone blocks were harvested from a bovine femoral head (18-24 months old) subjected to physical cleansing and chemical defatting, and further processed in two ways. Group I was subjected to demineralization, while Group II underwent decellularization through physical, chemical, and enzymatic treatments. Both were then freeze-dried, and gamma radiated, finally producing a demineralized bovine cancellous bone (DMB) scaffold and decellularized bovine cancellous bone (DCC) scaffold. Both DMB and DCC scaffolds were subjected to histological evaluation, scanning electron microscopy/energy-dispersive X-ray spectroscopy (SEM/EDS), fourier-transform infrared spectroscopy (FTIR), quantification of lipid, collagen, and residual nucleic acid content, and mechanical testing. The osteogenic potential was investigated through the recellularization of scaffolds with human osteoblast cell seeding and examined for cell attachment, proliferation, and mineralization by Alizarin staining and gene expression. DCC produced a complete acellular extracellular matrix (ECM) with the absence of nucleic acid content, wider pores with extensive interconnectivity and partially retaining collagen fibrils. DCC demonstrated a higher cell proliferation rate, upregulation of osteogenic differentiation markers, and substantial mineralized nodules production. Our findings suggest that the decellularization technique produced an acellular DCC scaffold with minimal damage to ECM and possesses osteogenic potential through the mechanisms of osteoconduction, osteoinduction, and osteogenesis in-vitro.