The innermost portion of a bone is called the bone marrow, which is a soft tissue. Yellow and red are the two types of marrow found in bones. Bones consist of three different kinds of bone material: the compact bone, spongy bone and bone marrow; compact bone is also called the "cortical bone," while spongy bone is referred to as "cancellous."
Cortical bone is the outermost part of bone; cancellous bone and bone marrow are found inside the cortical bone. Red marrow is important in the body because it manufactures red blood cells, platelets and white blood cells. The flat or long bones of the body, which can include the sternum, pelvis and skull, contain red bone marrow. Yellow bone marrow, which consists of fat cells, is located in areas of the body such as the medullary cavity.