The aim of this study was to evaluate the effectiveness of local application of growth differentiation factor-5 (GDF-5)-collagen composite on bone augmentation on the rat calvaria. GDF-5-collagen composite is made from recombinant human GDF-5 (rhGDF-5) and purified bovine type I atelocollagen. The GDF-5 solution was mixed with 0.3% atelocollagen acid solution, and the mixture was lyophilized. The spongy lyophilized material was pressed into the shape of a minidisk to make the GDF-5-collagen composite. The GDF-5-collagen composite contained 1, 10, or 100-microg rhGDF-5. The control collagen composite contained 0-microg rhGDF-5. The GDF-5-collagen composite or control collagen composite was inserted beneath the calvarial periosteum of 4-week-old rats. At 3 weeks after implantation, the implants containing 1-microg rhGDF-5 had mostly induced new bone formation on the cranial side. In the implants containing 10- microg rhGDF-5, bone formation had proceeded to the center of the GDF-5-collagen composite from the periosteal and the cranial sides, and bone marrow was seen focally. The augmented bone showed a connected trabecular structure with abundant vascularization. The implants containing 100-microg rhGDF-5 were nearly entirely replaced by new bone with bone marrow, and the augmented bone was firmly connected with the original bone. Neither cartilage nor bone formation was found in the control collagen composite. Thus, we conclude that the GDF-5-collagen composite may be a superior biomaterial for bone augmentation and this composite could be useful as a local osteoinductive device.