Changes in flexural rigidity and compression strength of 18 sheep tibias were investigated after laser perforation and partial demineralization. Test bones were divided into three groups: Group 1, no treatment; Group 2, laser hole grid; and Group 3, laser hole grid and partial demineralization. Starting in the anterior direction at the tibial tuberosity, the flexural rigidity was determined using a nondestructive four-point bending test. The elliptical distribution of the flexural rigidity before and after a specific treatment was compared. After the bending test, a cylindrical center section of each test bone was loaded axially to failure to determine subsequent changes in compression strength. Results showed that perforation alone produced minimal reduction of rigidity and insignificant changes in compression strength. However, additional partial demineralization resulted in larger reductions. In compression testing, perforated and partially demineralized bone specimen showed marked decrease of the ultimate failure stress. The observed increase in failure strain appeared to be related to compression of the laser holes. The findings of this study suggest that partial demineralization and perforation can be applied to diaphyseal bone grafts and that their decreased mechanical properties are a function of the bone volume reductions produced by both processes.