An autologous bone graft substitute composition for inducing new bone formation, promoting bone growth and treating bone defects, a method of preparation thereof, and a method of inducing or promoting bone growth by treatment of a bone with an autologous bone graft substitute composition. The composition includes autologous blood; one or more analogs of an osteogenic bone morphogenetic protein selected from BMP-6, BMP-2, BMP-7, BMP-4, BMP-5, BMP-8, BMP-9, BMP-12, and BMP-13, and combinations thereof; and a compression resistant matrix selected from the group consisting of a bone autograft, bone allograft, hydroxyapatite, tri-calcium phosphate, and combinations thereof. The autologous blood forms a coagulum gel comprising a fibrin-meshwork reinforced with the compression resistant matrix and containing the osteogenic bone morphogenetic protein which is released over a sustained period.