Analyzing bone micromechanics has become increasingly necessary for understanding how bone structure is adapted in response to mechanical stimulus. The complex geometry of bone microstructure makes it difficult to use traditional finite element techniques for analysis. The use of a finite element modeling procedure based on direct mesh generation from digital images using an Element-By-Element Preconditioned Conjugate Gradient solution technique for analyzing bone microstructure was presented. The results from digitized meshes were compared to smooth mesh results for microstructures of regular geometry to assess the digitized solutions. The digitized solutions were found to match the smooth mesh solutions well except near material boundaries where the digitized solutions exhibited numerical oscillations. A smoothing procedure utilizing Gaussian Filter techniques was investigated for smoothing solution oscillations, but results indicated that the filtering techniques did not significantly smooth the oscillations. In conclusion, digital image based finite element analysis will produce reasonably accurate estimates of stress and strain within microstructures but smoothing techniques for numerical oscillations at material boundaries need to be developed.