1. When osteochondral grafts of the femoral head measuring three to five millimeters in thickness were placed in a functional position on the neck of the femur in dogs, the osseous portion of the graft was accepted by the host. Although most if not all of the cellular elements died, complete replacement of the graft bone by host bone occurred. This was true in the autogenous, fresh homogenous, and plasma-stored homografts. 2. The cartilage portion of the autogenous grafts survived for one year, the duration of the experiment, as demonstrated histologically and by the ability of the transplanted chondrocytes to metabolize S35 when injected into the host. These cartilage grafts did not lose bulk. 3. In most fresh homogenous cartilage grafts the chondrocytes survived initially but in most instances there was delayed absorption of the cartilage and death of the cells in the areas so affected. This may have been the result of a delayed immunological reaction in which the host reaction was leveled primarily at the matrix. 4. The survival of the plasma-stored cartilage homografts was attributed to the method of storage since there is evidence that cartilage stored at 0 degree centigrade for seven days is less antigenic than fresh cartilage in homologous hosts.