The efficacy of Grafton(R) Demineralized Bone Matrix (DBM) used alone or combined with cancellous allograft, was assessed as a complete substitute for autogenous iliac-crest, and as a bone graft in the treatment of acute fractures and nonunions. A total of 44 patients were identified as having a graft of DBM with or without cancellous allograft. Fracture types encountered were 80.6% fractures, 19.4% nonunions, and 9.1% of patients had open injuries. The 36 patients (21 females, 15 males) had follow-up greater than 6 months. The overall primary healing rate was 91.7%, with an average time to union of 3.6 months (range 2 to 12 months). Three female patients with an average age of 74.3 years failed to heal and one required reoperation. There were no adverse side effects from the Grafton(R) DBM. The DBM promoted fracture healing through osteoinduction of local mesenchymal stem cells and this may explain the 3 nonunions that occurred in elderly, osteoporotic, post-menopausal females. In general, Grafton(R) DBM with cancellous allograft if needed, can be considered a safe and effective substitute for iliac crest bone graft.