Open surgery is rarely justified for the initial treatment of a unicameral bone cyst, but there is some debate concerning the relative effectiveness of closed methods. This study compared the results of steroid injection with those of autologous bone marrow grafting for the treatment of unicameral bone cysts. Between 1990 and 2001, 30 patients were treated by steroid injection and 28 by grafting with autologous bone marrow. The overall success rates were 86.7% and 92.0%, respectively (p>0.05). The success rate after the initial procedure was 23.3% in the steroid group and 52.0% in those receiving autologous bone marrow (p<0.05), and the respective cumulative success rates after second injections were 63.3% and 80.0% (p>0.05). The mean number of procedures required was 2.19 (1 to 5) and 1.57 (1 to 3) (p<0.05), the mean interval to healing was 12.5 months (4 to 32) and 14.3 months (7 to 36) (p>0.05), and the rate of recurrence after the initial procedure was 41.7% and 13.3% in the steroid and in the autologous bone marrow groups, respectively (p<0.05). Although the overall rates of success of both methods were similar, the steroid group had higher recurrence after a single procedure and required more injections to achieve healing.