In this sheep study, we have tested the hypothesis that an osteogenic response is triggered in the subchondral bone by periosteum implanted in full thickness cartilage defects and can be prevented by replacing the periosteum by a cell-free collagen type I/III membrane. Two 7-mm diameter osteochondral defects were made in the trochlea groove and in the medial femoral condyle of one of the knees in each of 15 adult sheep. The animals were divided into three groups (n=5): a control group with untreated cartilage defects, a group treated with autologous chondrocyte transplantation (ACT) and periosteum, and a group treated with ACT in combination with a collagen I/III membrane cover. Histological examination was performed 1 year later. The optical density of the subchondral bone in the histological sections was measured with digital imaging software. There was a dramatic, statistically significant (P<0.0001; power=1) increase in bone density of 45%-70% under defects that were treated with the periosteal cover, compared with the collagen membrane and control groups, which displayed the same bone density. There was no difference in the cartilaginous reparative tissue in the defects in the three groups. Periosteum thus stimulates the remodelling process in subchondral bone. Stiffening of the subchondral bone can lead to degeneration of the overlying reparative cartilaginous tissue because of an increase in the mechanical stress in the tissue. These findings warrant evaluation of subchondral bone changes in patients treated by ACT and the correlation of these changes with clinical outcome.