Bone lengthening by slow, progressive distraction has gained widespread acceptance. In this study we investigated the possibility of distraction osteogenesis in nonvascularized periosteal bone grafts, and assessed callus formation and callotasis by means of radiological and histological examination with the aim of determining the role of the periosteum. The process of distraction osteogenesis in nonvascularized bone grafts was studied histologically and radiologically in 22 growing rabbits. The metatarsal bone grafts taken from the rabbits were divided into two groups. Group 1 contained 15 bone grafts covered with periosteum and group 2 (the control group) contained 7 bone grafts without periosteum. These grafts were subjected to osteotomy and then placed in the lumbar pocket. After 10 days, distraction was started and continued at 0.5 mm per day for 10 days. Thus an elongation of 4 to 6 mm was achieved in both groups. Radiological examination was performed postoperatively and after 10, 15, 20, and 30 days of starting the distraction. Histological examination was performed after 15, 20, and 30 days. Radiologically, progressive calcification and, histologically, both intramembranous and endochondral ossification were detected in group 1 However, in the control group (group 2), bone lengthening failed. Our study demonstrated the possibility of distraction osteogenesis in periosteal bone grafts, and provides information regarding the importance of periosteum as well as its osteogenic capacity.