Periosteum has chondrogenic and osteogenic potential and plays an important role in fracture healing. The purpose of this study was to evaluate the reactive tissue formed after damaging the periosteum. Damaging the periosteum may be a way to generate ectopic cartilage or bone, which may be useful for the repair of articular cartilage and bone defects. Periosteum was bilaterally dissected from the proximal medial tibia of New Zealand White rabbits. Reactive periosteal tissue was harvested 10, 20, and 40 days postsurgery and analyzed for expression of collagen types I, II, and X, aggrecan, osteopontin, and osteonectin (by reverse transcription-polymerase chain reaction) and collagen types I and II (by immunohistochemistry). Reactive tissue was present in 93% of cases. Histologically, this tissue consisted of hyaline cartilage at follow-up days 10 and 20. Expression of collagen type II and aggrecan was present at 10 and 20 days postsurgery. Highest expression was at 10 days. Expression of collagen type X increased up to 20 days. No significant changes in the mRNA expression of osteopontin or osteonectin were observed. Immunohistochemistry confirmed the presence of cartilage, which was positive for collagen types I and II at 10 days and only for collagen type II at 20 days. At 20 days postsurgery the onset of bone formation was also observed. At 40 days postsurgery, the reactive tissue had almost completely turned into bone. The quality and amount of cartilage formed 10 days postsurgery make this technique potentially useful to fill large cartilage and bone defects. Also, periosteal callus formation, providing possible useful information for tissue engineering techniques, can be studied with this model.