Twenty rabbit femurs were used to study the effect of CO2 laser on cortical bone. Sixteen femurs were treated with 20 watts, 3 mm defocused beam, 2 KHZ spike pulse mode CO2 laser for 10 seconds through a circular window in the metaphysis. In four control femurs, the inner cortex was exposed without laser treatment. The animals were killed at 4 and 6 weeks and the specimens studied histologically. All laser-treated specimens showed thermal changes. Three histological zones were observed. A superficial zone of inner cortex close to the beam consisted mainly of carbonization or carbon ash during resorption. An intermediate zone consisted of bone necrosis and healing with associated areas of new bone formation. The deep zone of outer cortex had normal bone with no cellular damage. No such changes were observed in the control specimens. The CO2 laser can be used to generate a controlled zone of tissue ablation, which may make it a potentially useful tool for tumor margin cauterization.