This study was carried out to develop a calcium phosphate-gelatin composite implant that would mimic the structure and function of bone for use in filling voids or gaps and to release bioactive compounds like drugs, growth hormones into the implant site to assist healing. XDS analysis of the synthesized calcium phosphate revealed a calcium to phosphorus molar ratio of ca. 2.30, implying a less erodible material than hydroxyapatite (1.67). Release of the antibiotic gentamicin from the implant was with a burst, whether in situ or in vivo, followed by an almost constant release for about three months. It was found that the release rate could be decreased by increasing the density of the gelatin membrane. Upon implantation into rabbit tibia the release duration was substantially shortened (to about 4 weeks) with respect to the in situ tests basically due to the degradation of gelatin. In vivo studies with rabbits confirmed this degradation. The composite was perfectly biocompatible as shown by the histological studies. It, thus, has a great potential as a bone substitute material.