A bone implant comprising cancellous bone that is essentially free of blood cells, and which has been treated with at least a loosening agent, such as collagenase and/or a digestive enzyme, for a time and at a concentration to loosen the osteogenic cells in the cancellous bone matrix. The osteogenic cells in the matrix are viable cells. The treatment of the cancellous bone with at least one loosening agent enables the osteogenic cells to be more available for carrying our their osteogenic function and to provide for an increased rate of bone formation.