Our bones are made up of many different layers. On the outside, there is a covering membrane called periosteum. Surrounding every bone is compact bone, which is a smooth and hard layer of bone. Underneath the hard layer is the spongy layer of the bone, called the spongy bone. It has lots of holes and spaces and looks like a sponge. Spongy bone is lighter than compact bone, but still hard and strong. Inside most bones is a fatty jelly called bone marrow. This marrow fills the holes inside the bones. It makes red blood cells and stores fat.