Bone is very strong but also very porous. There are tiny holes between cells where new bone growth can form when needed. In the case of bone graft material, bone from a bone bank or harvested from some other part of the body is used. Bone taken from your own pelvic crest (hip) is referred to as an autologous graft.
The body usually works better making new bone when the donor graft is your own bone. But bone from a bone bank (when well matched) can work, too. The bone graft doesn’t really grow new bone cells. Once the bone is removed, the cells are not alive. What they provide is a collagen matrix or structure.
The collagen matrix is removed and replaced as the body sends in blood vessels to destroy the old collagen and replace it with living cells and new bone cells. The new bone grows into the interconnecting pores of the old bone. A microlock-type of interface is formed between the two bony surfaces.
Bone substitutes such as ceramic and other products don’t form new bone. They just provide a porous surface with excellent surface bonding properties to promote attachment of new bone. Some of the compounds used are bioactive. This means they are biologically active and ensure the rapid growth of new bone.