A biodegradable composite which was composed of genipin cross-linked gelatin mixing with tricalcium phosphate ceramic particles (GGT) was developed as a bone substitute. This study was evaluated by the biological response of rabbit calvarial bone to assess the potential of the GGT composite as a biodegradable and osteoconductive bone substitute. Eighteen New Zealand white rabbits were used for cranial implantation. Bone defects (15×15 mm) of nine rabbits were filled with the GGT composites, while the others were filled with the de-proteinized bovine bones as controls. Three rabbits were examined for each group in every time period at 4, 8 and 12 weeks post-surgery. The assessment included serial post-operative gross examinations, radiographic analyses and histological evaluations. This study demonstrated that this composite is: (1) malleable, with easily molded to the calvarial bone defect without fracture; (2) biocompatible, with no evidence of adverse tissue reaction; (3) osteoconductive, with progressive growth of new bone into the calvarial bone defect; (4) biodegradable, with progressive replacement of the composite by new bone. Additionally, results of both radiographic analyses and histological evaluations revealed obviously greater new bone ingrowth in the GGT composite compared with the de-proteinized bovine bone at the same implantation time. Therefore, the GGT composite could serve as a useful bone substitute for repairing bone defects.