Bone formation, or ossification, begins around the sixth to seventh week of embryonic development. Most bones develop from a cartilaginous template through the process of endochondral ossification. Cartilage formation begins when clusters of mesenchymal cells differentiate into chondrocytes. These chondrocytes proliferate rapidly and secrete an extracellular matrix that becomes encased in a membrane called the perichondrium. The resulting cartilage model provides a template that resembles the general shape of the future bone.

When the peripheral blood vessels infiltrate the perichondrium, it develops into the periosteum. The mesenchymal cells then differentiate into osteoblasts and secrete bone matrix around the diaphysis, forming the bone collar. As the bone collar forms, the chondrocytes in the center of the diaphysis grow in size. This hypertrophy promotes cartilage matrix calcification, preventing nutrients from diffusing to the chondrocytes. This results in cell death and the disintegration of the surrounding cartilage, forming cavities. The bone collar stabilizes the cartilage model while healthy cartilage continues to grow at the epiphyses, contributing to growth in the size of the bone.

Simultaneously, the periosteal bud containing the nutrient artery and vein, nerve fibers, hematopoietic cells, and osteogenic cells invade the cavities in the diaphysis. The osteogenic cells differentiate into osteoblasts and secrete new bone matrix at this primary ossification center. Osteoclasts, derived from the hematopoietic cells, degrade the central matrix to form the medullary cavity that houses red marrow.

This process of cartilage formation and replacement by bone matrix continues as the bone grows in size. The epiphyses begin ossification from secondary ossification sites, which form after birth. Ossification of cartilage in the epiphyses and diaphysis continues until adolescence, when the bones stop growing.