An osteoimplant includes at least partially demineralized cancellous bone as a substrate, which is impregnated with demineralized cortical bone matrix (DBM). The implant may include a binding agent to adhere the DBM to the cancellous bone substrate, and may also include a soft tissue barrier that covers a portion of the external surface of the implant. The cancellous bone substrate may be selectively demineralized, so as to provide regions with greater malleability, and other regions with greater structural properties.
