An osteoinductive composition is provided which includes a plurality of surface demineralized fibrous bone chips. Each fibrous bone chip has a BET surface area from about 10 m2/gm to about 70 m2/gm. The osteoinductive composition can also include fully demineralized bone fibers. The osteoinductive composition including the surface demineralized fibrous bone chips with or without fully demineralized bone fibers can be placed in a covering, such as a mesh bag. The osteoinductive composition can include other bone structures and/or bioactive agents and/or ceramics. A method of treating a bone cavity in a patient in need thereof with the osteoinductive composition including a plurality of surface demineralized fibrous bone chips with or without fully demineralized bone fibers is also provided.
