Processed cancellous bone has been regarded as one alternative for the treatment of bone defects. In order to avoid immunogenic effects and preserve the natural properties of the bone, the optimal processing method should be determined. To observe the influence of hydrogen peroxide on the mineral status and mechanical properties of cancellous bone for various time periods and find the optimal processing time. Cancellous bone granules from bovine femur condyles were treated with 30% hydrogen dioxide for 0, 12, 24, 36, 48, 60 and 72 h separately. The microstructure and mineral content of the granules were evaluated by ash analysis, Micro-CT, scanning electron micrograph and energy dispersive X-ray. The biomechanical properties were analyzed by applying cranial-caudal compression in a materials testing machine. With increasing exposure to hydrogen peroxide, the BMD and BMC of granules gradually decreased, and the Ca/P molar ratios clearly increased (P < 0.05). Meanwhile, the mineral content of the granules increased from 48.5 ± 1.3 to 79.5 ± 2.1%. Substantial decreases in the strength of the granules were observed, and after 48 h severe decreases were noted. The decrease in strength was also evident after normalizing the parameters to the cross-sectional area. Granules of bovine cancellous bone matrix should be processed by hydrogen peroxide for 12 to 36 h to fulfill the basic requirements of a bone tissue engineering scaffold. These granules could potentially be useful during orthopedic operations.