Fibrin plays a major role in blood clotting and is important in wound healing. In the present study, physiologically clotted fibrin (PF) and calcined bone (CB) both of bovine origin were used in the preparation of a bone graft material with chitosan (C) as a binder. This bone graft (PF-CB) was characterized by stress-strain analysis, X-ray diffraction (XRD) studies, scanning electron microscopy, differential scanning calorimetry, thermogravimetric analysis, and FTIR spectroscopy. Thermal studies revealed that the incorporation of CB into PF did not alter the thermal stability of fibrin, although it affects the total loss percentage. The composition containing 24:1:15 (PF:C:CB) on dry weight basis exhibited maximum compressive strength, and the same composite was used for characterization studies. The XRD studies have shown the amorphous nature of the implant. SEM pictures revealed the heterogeneity and porous nature of the implant. PF in combination with CB is expected to exhibit osteoinductivity because fibrin, the osteoinductive protein, acts as an angiogenic factor, whereas CB provides calcium and phosphate ions that are needed for new bone formation.