In this study, the biocompatibility and the osteogenic features of a new iron-modified α-tricalcium phosphate (IM/α-TCP) and calcium sulphate dihydrate (CSD) biphasic cement (IM/α-TCP/CSD-BC) have been investigated in terms of the in vivo cement resorption, bone tissue formation and host tissue response on sheep animal model. Histological evaluation performed on undecalcified cement–bone specimens assessed the in vivo behaviour. It has been shown that the new IM/α-TCP/CSD-BC has the ability to produce firm bone binding in vivo (i.e. bioactivity). Qualitative histology proved cement biocompatibility, osteoconduction and favourable resorption, mainly through a macrophage-mediated mechanism. The results showed that the new cements have biocompatible and osteogenic features of interest as possible cancellous bone replacement biomaterial for minimally invasive spinal surgery applications.