The present invention is directed to a method of growing new bone, bone-like tissue or extracellular matrix under in vitro cell culture conditions. The method utilizes a bioreactor allowing for the flow of nutrient solutions into, through, and out of the bioreactor, wherein ground demineralized bone and bone-forming cells are present in the bioreactor. The resulting bone, bone-like tissue or extracellular matrix produced by the invention are within the scope of the present invention. In addition, the present invention is directed to the bioreactor device used to grow the new bone, bone-like tissue, or extracellular matrix.