The outer layer of the bone is called the periosteum. This membrane layer of the bone is dense and made up of fibrous tissue. It also consists of nerves and blood vessels that provide blood flow to the bone.
The periosteum is one of four layers that makes up the bone. The other three layers are the compact bone, cancellous bone and bone marrow. Compact bone is a smooth and hard bone layer, while cancellous bone is a spongy layer found inside the compact bone. Although cancellous bone is strong, it is more porous than compact bone. The innermost bone layer consists of bone marrow. The main function of bone marrow is to manufacture blood cells.