Benign bone tumors are commonly treated with intralesional curettage and bone graft, with autogenous bone graft being the gold standard. However, autogenous bone graft has its limitation, and artificial bone graft substitutes were developed as an alternative. PRO-DENSE™ (Wright Medical Technology, Arlington, Tennessee) is a calcium sulfate and calcium phosphate mixed bone graft substitute that is biodegradable and osteoconductive, which has made them a popular choice among surgeons. However, long-term studies of this treatment method for benign tumors are still limited. In this report, we present a case of progressive femoral neck osteolysis caused by an inflammatory reaction to PRO-DENSE™ two years after intralesional curettage and bone grafting of a benign bone tumor. A twenty-one-year-old female with fibrous dysplasia underwent intralesional curettage with the use of PRO-DENSE™ bone substitute to fill the cavitary defect. She developed an inflammatory reaction to the bone graft substitute leading to increasing pain and osteolysis requiring a reoperation. Bone graft substitute has many advantages; however, they should be used with discretion due to many unknown regarding their safety and long-term outcomes.