OSTEOTECH INC
4, 1996-07-09
MISC HEALTH & ALLIED SERVICES, NEC
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<PAGE>

FORM 4 


                               U.S. SECURITIES AND EXCHANGE COMMISSION
                                       WASHINGTON, D.C. 20549
                    STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
<square>Check this box if no longer
   subject to Section 16. Form 4   Filed pursuant to Section 16(a) of the
                         Securities Act of 1934, Section 17(a) of the Public 
                           Utility Holding Company Act of 1935 or Section
or Form 5 obligations      30(f) of the Investment Company Act of 1940
   may continue.  SEE Instruction 1(b).


<TABLE>
<CAPTION>
1. Name and Address of Reporting Person        2. Issuer Name and Ticker or Trading Symbol   6.  Relationship of Reporting Person
                                                                                             to Issuer
McNerney,        Walter    J.                        OSTEOTECH, INC. (OSTE)                  (Check all applicable)
                                                                                                   X     Director______ 10% Owner
<S>                                            <C>        <C>   <C> <C>      <C>    <C>      <C>            <C>         <C>
(Last)              (First)           (Middle) 3. IRS or Social     4. Statement for            _______ Officer      ______ Other
                                                  Security Number      Month/Year               (give title below)
675 BLACKTHORN ROAD                               of Reporting                               (specify below)
                                                  Person                   June 1996
                                                  (Voluntary)                                President and Chief Executive Officer

                   (Street)                                         5. If Amendment, Date of
WINNELKA                     IL      60093                          Original (Month/Year)
(City)              (State)              (Zip)
                                               TABLE I - NON-DERIVATIVE SECURITIES ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED
1. Title of Security                           2. Trans-  3. Trans- 4. Securities Acquired   5. Amount of   6. Owner-   7. Nature
   (Instr. 3)                                     action     action    (A) or Disposed of       Securities     ship        of In-
                                                  Date       Code      (D)                      Beneficially   Form:       direct
                                                  (Month/  (Instr.     (Instr. 3, 4 and 5)      Owned at       (D) or      Bene-
                                                 Day/       8)                                    End of         Indirect    ficial
                                                 Year)                                            Month          (I)         Owner-
                                                                                                (Instr. 3      (Instr.     ship
                                                                                               and 4)         4)             (Instr.
                                                                                                                           4)
                                                          Code   V   Amount  (A) or Price
                                                                               (D)


</TABLE>

Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
                                               (Over)













<PAGE>

FORM 4 (CONTINUED)


                          TABLE II - DERIVATIVE SECURITIES ACQUIRED,
                     DISPOSED OF, OR BENEFICIALLY OWNED
               (E.G., puts, calls, warrants, options, convertible securities)

<TABLE>
<CAPTION>
1. Title of Derivative 2.Conver-3.Trans-4.Transac-5.Number of6.Date    7.Title and Amount 8.Price9.Number 10.  Owner-  11.  Na-
Security                 sion     action tion  Deriv-       Exercisableof Under-lying       of    of        ship         ture
   (Instr. 3)            or       Date   Code  ative        and        Securities (Instr.   Deriv-Deriv-     Form         of In-
                         Exercise (Month/Day/(Instr.SecuritiesExpiration3 and 4)            ative ative      of De-       direct
                         Price    Year)8)      Ac-          Date                            Secur-Secur-     rivative     Bene-
                         of                    quired (A)   (Month/Day/                     ity   ities      Secur-       ficial
                         Deriv-                or Dis-      Year)                           (Instr.Bene-     ity:         Own-
                         ative                 posed of                                     5)    ficially   (D) or         ership
                       Security                (D)                                                Owned      Indi-       (Instr. 4)
                                               (Instr. 3,                                         at End     rect (I)
                                             4, and 5)                                            of        (Instr. 4)
                                                                                                  Month
                                                                                                  (Instr.
                                                                                                   4)
<S>                    <C>      <C>   <C> <C>  <C>  <C>   <C>   <C>    <C>         <C>    <C>      <C>   <C>      <C>
                                       Code V  (A) (D)   Date  Expira-    Title   Amount
                                                          Exer- tion               or
                                                          cisableDate              Number
                                                                                   of
                                                                                   Shares
Stock Option+          $7.750   6/6/96 A  v  10,000       ++    6/6/06 Common    10,000   $7.750   10,000    D    ---
(Right to Buy)                                                         Stock
</TABLE>

  Explanation of Responses:

  +    Granted under the Company's Independent Stock Option Plan, as amended, a
       Rule 16b-3 plan.

 ++    Exercisable as to 2,500 shares on each of June 6, 1997, June 6, 1998,
       June 6, 1999 and June 6, 2000.




** Intentional misstatements or omissions of facts constitute Federal Criminal
   Violations.
                          /s/WALTER J. MCNERNEY                        7/8/96

   SEE 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
                          **Signature of Reporting Person                Date
                          Walter J. McNerney

Note:  File three copies of this Form, one of which must be manually signed.
   If space provided is insufficient, SEE Instruction 6 for procedure.
                                                      SEC 1474 (8-92)



















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