The amount of new bone formed in collagen matrix with daidzein was compared to that formed in collagen matrix alone. Eighteen bone defects, 5mm by 10mm were created in parietal bone of 9 New Zealand white rabbits. In the experimental group, 6 defects were grafted with collagen matrix with daidzein. In the control groups, 6 defects were grafted with collagen matrix alone (positive control) and 6 were left empty (negative control). Animals were killed on day 14 and the defects were dissected and prepared for histological assessment. Serial sections were cut across each defect. Quantitative analysis of new bone formation was made on 100 sections (50 sections for each group of daidzein and positive control) using image analysis. A total of 602% more new bone was present in defects grafted with daidzein in collagen matrix than those grafted with the collagen matrix alone. Very little new bone formed in the negative control group. In conclusion, daidzein in collagen matrix has the effect of increasing new bone formation locally and can be used for bone grafting.