Bone marrow ablation prompts transient bone formation in nearly the entire medullary cavity before marrow regeneration occurs. Here, we establish a procedure to direct bone formation in a desired particular site within the medullary cavity for support of biomedical devices. Local intramedullary injury was performed in the tibiae of rats and parathyroid hormone (PTH), alendronate, or saline was administered. Newly generated bone in the medulla was assessed by micro-CT and histology. To evaluate the function of newly generated bone, animals received intramedullary injury in tibiae followed by daily PTH. At day-14, implants were placed in the endocortical bone and the bone response to the implants was assessed. The fate of newly generated bone was compared with and without implants. We found that neither intramedullary injury nor medication alone resulted in bone formation. However, when combined, substantial bone was generated locally inside the diaphyseal medulla. Newly formed bone disappeared without implant placement but was retained with implants. Bone was especially retained around and between the implants. This study found that local bone marrow disruption followed by PTH or alendronate generated substantial cancellous bone locally in the diaphyseal medulla. This approach offers promise as a tissue engineering tool in medicine and dentistry.