Transforming growth factor-beta1 (TGF-beta1) plus demineralized bone matrix (DBM) will reconstruct a critical mandibular defect devoid of periosteum in a canine model. Randomized, blinded, placebo-controlled, prospective animal pilot study. Canine critical mandibular defects devoid of periosteum were reconstructed with DBM (group 1, n = 3) and DBM plus TGF-beta1 (250 microg TGF-beta1/g DBM) (group 2, n = 3). Radiologic, histologic, and biomechanical testing was performed on the test group and control group specimens at 12 weeks after implantation. A palpable bone bridge was present in the group 2 subjects 5 to 6 weeks after implantation and was never present in the group 1 subjects. Radiologic and histologic examination at the time of harvest (12 weeks after implantation) demonstrated a solid bone bridge in the group 2 subjects and a fibrous union in the group 1 subjects. Group 2 specimens demonstrated failure in four-point bending testing at an average maximum moment of 9.9 +/- 2.2 N-m. This value was 9.4% of the maximum moment of the contralateral nonoperated side. Group 1 specimens were palpably flexible on plate removal and had a biomechanical strength of 0. The difference in strength between group 1 and group 2 was statistically significant (P < 0.02), supporting the hypothesis that the addition of TGF-beta1 to the DBM carrier resulted in the formation of significantly stronger bone in the critical gap. The addition of TGF-beta1 to DBM results in healing of a critical bone defect devoid of periosteum in a higher mammalian model.