The bone inducing factor derived from BF osteosarcoma was purified in the following manner. Step 1. The sarcoma, grown in CBA mice, was excised and lyophilized. Step 2. The powder was washed with chilled acetone. Step 3. The acetone-treated powder was then homogenized with chilled distilled water. Step 4. Washing with 0.15M KCl. Step 5. The precipitate was incubated in in 0.2 N NH2OH, pH7.0, for 48 H at 25 degrees. After Step 5, the bone-forming activity showed a slight increase; however, the factor remained insoluble. The properties of the factor were as follows. The factor is relatively relatively heat stable; the osteogenic activity survived the treatment at 75 degrees for 15 min or at 55 degrees for 19 h. The activity was easily lost by mechanical shaking. Incubation with DNase, RNase, neuraminidase, chondroitinase ABC and beta-galactosidase left the osteogenic activity intact, but treatment with either pronase or collagnease destroyed this activity. The results suggest that the factor may be a protein. The activity was seen with the lyophilized BF osteosarcoma cells (without matrix), and it is probable that the factor was exclusively synthesized in the cells. The bone formation, observed across a millipore filter when living BF osteosarcoma enclosed in a millipore chamber was implanted in mice, suggests the synthesis and secretion of the factor from the cells.