We for the first time applied x-ray diffraction microscopy to the imaging of mineral crystals inside biological composite materials--intramuscular fish bone--at the nanometer scale resolution. We identified mineral crystals in collagen fibrils at different stages of mineralization. Based on the experimental results and biomineralization analyses, we suggested a dynamic model to account for the nucleation and growth of mineral crystals in the collagen matrix. The results obtained from this study not only further our understanding of the complex structure of bone, but also demonstrate that x-ray diffraction microscopy will become an important tool to study biological materials.