The purpose of this study was to prepare and evaluate the feasibility and biocompatibility of a new composite as a bone substitute. The new composite (GTGC) was mainly composed of tricalcium phosphate ceramics and gelatin to which Chi-Li-Saan, a Chinese medicinal remedy was added. The GTGC composite was manually packed into cylindrical Teflon molds, dried overnight in an oven and sterilized by γ-ray prior to use. Mature New Zealand rabbits, weighting 3–3.5 kg, underwent full-thickness excision of the parietal bone. In the experimental group, bone defects of 12 animals were filled with the GTGC composites and another 12 unreconstructed rabbits were considered as controls. Three rabbits were examined for each group in every time period at 2, 4, 8 and 12 weeks after operation. There was no evidence of adverse tissue reaction to the GTGC composite. In addition, examination with light and fluorescent microscopy revealed a significantly greater amount of new bone ingrowth in the GTGC group at the same implantion time as compared with the controls. Therefore, the GTGC composite could serve as a useful substitute when repairing bone defects.