In this study, we propose a new bioactive bone cement (BBC), composed of natural bone powder (hydroxyapatite; HA), chitosan powder, and the currently available polymethylmethacrylate (PMMA) bone cement, for use in orthopedic surgeries such as vertebroplasty or as bone filler. Three types of BBCs (BBC I, BBC II, and BBC III) were prepared with different composition ratios. In vitro tests and animal studies were performed with the new BBCs, and with a currently available commercial PMMA bone cement. Surface morphology, chemical composition, changes in pH over time, exothermic temperatures, intrusion, and cellular responses were investigated in vitro. Scanning electron microscopy (SEM) and radiological and histological examinations were performed in animal studies. The results showed that the major components of the BBCs were C, O, Ca, P, Cl, Si, S, Ba, and Mg. The pH values of the BBCs decreased after 1 day, but eventually recovered to 7.2-7.4. The water absorbency, weight loss, and porosity of the BBCs were higher than those of pure PMMA, but the compressive Young's modulus and the ultimate compressive strength (UCS) of the BBCs were lower than those of pure PMMA. The exothermic temperatures of the BBCs were considerably lower than that of pure PMMA. BBC II and III required longer times to solidify than did pure PMMA. Intrusion tests showed that the BBCs were more intrusive than was pure PMMA. Cell proliferation tests demonstrated that BBC II was preferable to pure PMMA for cell attachment and proliferation. No cytotoxic characteristics were found associated with any of the BBCs. In animal tests, BBC II was more biocompatible and osteoconductible than was pure PMMA. The results of in vitro and animal studies indicated that the proposed BBCs have potential clinical application as replacements for the pure PMMA bone cements currently in use.