The histology and mechanics of leg lengthening by callus distraction were studied in 27 growing rabbits. Tibial diaphyses were subjected to subperiosteal osteotomy, held in a neutral position for 10 days and then slowly distracted at 0.25 mm/12 hours, using a dynamic external fixator. Radiographs showed that the gap became filled with callus having three distinct zones. Elongation appeared to occur in a central radiolucent zone; this was bounded by two sclerotic zones. Histologically, the radiolucent zone consisted of longitudinally arranged cartilage and fibrous tissue while the sclerotic zones were formed by fine cancellous bone. New bone occasionally contained islands of cartilage, suggesting it had been formed by endochondral ossification. After completion of distraction, the two sclerotic zones fused, shrank and were eventually absorbed, leaving tubular bone with a new cortex. When the periosteum had been removed at the operation, callus formation was markedly disturbed and there was failure of bone lengthening. Scraping of endosteum, in contrast, did not have a pronounced effect. These results suggest that the preservation of periosteum is essential if bone lengthening by callus distraction is to succeed, and that preservation of the periosteum is more important than careful corticotomy.