In the middle of a bone is the marrow. This is where the blood cells are made. Marrow is considered tissue so it is spongy and not hard like the bone around it. The bone itself acts as a protector of the marrow. The production of new blood cells is called hematopoiesis.
Sometimes, people need bone marrow transplants because their marrow may not be producing enough blood cells for the body. Other main reasons for the bone marrow transplants is because the person has cancer.
One of the main types of cancer is leukemia. It is a rather painful process to donate bone marrow to a needy person. The only time that a bone marrow transplant is done is when it is life-threatening.