Several publications have shown the phenomenon of osteoinduction by biomaterials to be real. However, whether the ability of a biomaterial to initiate bone formation in ectopic implantation sites improves the performance of such osteoinductive biomaterial in clinically relevant orthotopic sites remains unclear. No studies have been published in which osteoinductive potential of a biomaterial is directly related to its performance orthotopically. In this study, we compared osteoinductive and nonosteoinductive biphasic calcium-phosphate (BCP) ceramics ectopically and in a clinically relevant critical-sized orthotopic defect in goats. The two materials, BCP1150 and BCP1300, had similar chemical compositions, crystallinities, and macrostructures, but their microstructures differed significantly. BCP1150, sintered at a lower temperature, had a large amount of micropores, small average crystal size, and hence a high specific surface area. In contrast, BCP1300, with few micropores, had a significantly lower specific surface area as compared to BCP1150. Twelve-week intramuscular implantation in goats (n=10) showed that bone was induced in all BCP1150 implants, while no signs of bone formation were found in any of the BCP1300 implants. After 12 weeks of implantation in a bilateral critical-sized iliac wing defect in the same goats, BCP1150 showed significantly more bone than BCP1300. In addition, the analysis of fluorochrome markers, which were administered to the animals 4, 6, and 8 weeks after implantation to follow the bone growth dynamics, showed an earlier start of bone formation in BCP1150 as compared to BCP1300. Significantly better performance of an osteoinductive ceramic in a criticalsized orthotopic defect in a large animal model in comparison to a nonosteoinductive ceramic suggests osteoinduction to be clinically relevant. Further improvement of material osteoinductive properties is thus a significant step forward in the search for alternatives for autologous bone graft.