A cutting instrument and method of use for preparing an osteochondral plug for implantation into a bone defect site. The instrument includes a dual function cutting block, a base holder, a rod mechanism and a trimming mechanism. The cutting block has a bore sized to receive the plug, at least one trimming channel and a transverse paring slot. The cutting block functions to hold the plug within the bore to allow for length and cross-sectional sizing. The base holder is constructed to fix the cutting block in a first orientation that allows the rod mechanism to position the plug within the cutting block for accurate length sizing. The base holder is also constructed to fix the cutting block in a second orientation which aligns the cutting block with the trimming mechanism so that an angled blade may engage the trimming channel and cut at least two sides of the plug.