Bone is a specialized form of connective tissue that forms the skeleton of the body and is built at the nano and microscale levels as a multi-component composite material consisting of a hard inorganic phase (minerals) in an elastic, dense organic network. Mimicking bone structure and its properties present an important frontier in the fields of nanotechnology, materials science and bone tissue engineering, given the complex morphology of this tissue. There has been a growing interest in developing artificial bone-mimetic nanomaterials with controllable mineral content, nanostructure, chemistry for bone, cartilage tissue engineering and substitutes. This review describes recent advances in bionanomaterials for bone tissue engineering including developments in soft tissue engineering. The significance and basic process of bone tissue engineering along with different bionanomaterial bone scaffolds made of nanocomposites and nanostructured biopolymers/bioceramics and the prerequisite biomechanical functions are described. It also covers latest developments in soft-tissue reconstruction and replacement. Finally, perspectives on the future direction in nanotechnology-enabled bone tissue engineering are presented.