Bone is living tissue that makes up the body's skeleton. There are 3 types of bone tissue: compact tissue, which is the harder, outer tissue of bones; cancellous tissue, which is the sponge-like tissue inside bones; subchondral tissue, which is the smooth tissue at the ends of bones, which is covered with another type of tissue called cartilage. Cartilage is a specialized, rubbery connective tissue. The tough, thin outer membrane covering the bones is called the periosteum. Under the hard outer shell of the periosteum are tunnels and canals. Through these, blood and lymphatic vessels carry nourishment for the bone. Muscles, ligaments, and tendons may attach to the periosteum.

Source: University of Rochester Medical Center