Morselized cancellous allograft was used to fill large femoral and/or tibial defects in 63 patients (63 knees) who had revision surgery for failed arthroplasty between September 1988 and January 1993. Firm seating of the components on a rim of viable bone and rigid fixation with a medullary stem were achieved in all cases. One patient was lost to followup, leaving 62 patients with standard radiographic evaluation at 1 month, 3 months, and yearly intervals postoperatively. Fourteen patients required reoperation between 3 weeks and 37 months after revision surgery for loosening (two patients), wound avulsion (one patient), wound hematoma (two patients), painful wires (four patients), patellar tendon avulsion from the tibial tubercle (two patients), patellar subluxation (one patient), or late onset instability (two patients). A biopsy specimen was taken from the central portion of the allograft in each case. Evidence of healing, bone maturation, and formation of trabeculae was seen in all allografted areas visible on radiograph at 1 year after surgery. No sign of significant bone graft loss had occurred in any case. Likewise, all biopsy specimens, including the 3-week specimen, showed evidence of active new bone formation in the allografted area. Active bone formation was found in and around the allograft pieces, and new osteoid formed directly on dead allograft trabeculae. Vascular stroma was present between the bone fragments deep in the allograft mass. Older biopsy specimens evidenced progressive maturation, and evidence of active osteoclastic activity was absent by 18 months after surgery. All patients but one had significant improvement in their pain score as compared with their preoperative status. Although the complication rate was high (22%), all but one patient achieved lasting fixation to bone, adequate ligament balancing, good range of motion, and minimal to mild pain. Two patients required revision surgery. Both had greatly improved bone stock so that new implants could be applied with minor additional grafting. This method of bone stock reconstitution appears to be reliable when used in conjunction with firm rim seating and rigid intramedullary stem fixation.