The purpose of this study was to present a theoretical analysis of how the presence of bone in interstitial brachytherapy affects dose rate distributions. This study was carried out using a Monte Carlo simulation of the dose distribution in homogeneous medium for 3 commonly used brachytherapy seeds. The 3 seeds investigated in this study are iridium-192 (192Ir) iodine-125 (125I), and palladium-103 (103Pd). The computer code was validated by comparing the specific dose rate (Lambda), the radial dose function g(r), and anisotropy function F(r,theta;) for all 3 seeds with the AAPM TG-43 dosimetry formalism and current literature. The 192Ir seed resulted in a dose rate of 1.115 +/- 0.001 cGy-hr(-1)-U(-1), the 125I seed resulted in a dose rate of 0.965 +/- 0.006 cGy/h(-1)/U(-1), and the 103Pd seed resulted in a dose rate of 0.671 +/- 0.002 cGy/h(-1)/U(-1). The results for all 3 seeds are in good agreement with the AAPM TG-43 and current literature. The validated computer code was then applied to a simple inhomogeneous model to determine the effect bone has on dose distribution from an interstitial implant. The inhomogeneous model showed a decrease in dose rate of 2% for the 192Ir, an increase in dose rate of 84% for 125I, and an increase in dose rate of 83% for the 103Pd at the surface of the bone nearest to the source.