Biocompatibility of two calcium phosphate cements (CPCs), reinforced with phosphorylated chitosan (P-chitosan), was investigated in rabbits in present study. The two CPCs are monocalcium phosphate monohydrate (MPCM) with calcium oxide (CaO) in 1 m phosphate buffer (i.e. MCPM/CaO/1 m phosphate buffer cement, CPC-I) and dicalcium phosphate dihydrate (DCPD) with calcium hydroxide [Ca(OH)2] in 1m Na2HPO4 solution (i.e. DCPD/Ca(OH)2/1 m Na2HPO4 cement, CPC-II). Different amount of P-chitosan was added to the liquid phase before the power phase was mixed with the liquid phase. The MCPM/CaO/1 m phosphate buffer/P-chitosan cements (P-CPC-I) with neutral pH were filled into the holey defects of rabbit tibias. While the DCPD/Ca(OH)2/1 m Na2HPO4/P-chitosan cements (P-CPC-II) shaped as prehardened cylinders were implanted into rabbit radial defects. After operation, the two serial groups and CPC-II controls were observed for 1, 4, 12 and 22 weeks, respectively. Histological and histomorphological studies proved that P-chitosan containing cements are biocompatible, bioabsorbable and osteoinductive. The biodegradation rate has a negative relationship with the P-chitosan content. Progressive substitution took place at the interface of implants and host bones. No adverse effects were found in tissues around the bone defects. Thus, they could be used as bone substitutes in clinic