Novel nanocomposite hydrogels composed of polyelectrolytes alginate and chitin whiskers with biocompatibility were successfully fabricated based on the pH-induced charge shifting behavior of chitin whiskers. The chitin whiskers with mean length and width of 300 and 20 nm were uniformly dispersed in negatively charged sodium alginate aqueous solution, leading to the formation of the homogeneous nanocomposite hydrogels. The experimental results indicated that their mechanical properties were significantly improved compared to alginate hydrogel and the swelling trends were inhibited as a result of the strong electrostatic interactions between the chitin whiskers and alginate. The nanocomposite hydrogels exhibited certain crystallinity and hierarchical structure with nanoscale chitin whiskers, similar to the structure of the native extracellular matrix. Moreover, the nanocomposite hydrogels were successfully applied as bone scaffolds for MC3T3-E1 osteoblast cells, showing their excellent biocompatibility and low cytotoxicity. The results of fluorescent micrographs and scanning electronic microscope (SEM) images revealed that the addition of chitin whiskers into the nanocomposite hydrogels markedly promoted the cell adhesion and proliferation of the osteoblast cells. The biocompatible nanocomposite hydrogels have potential application in bone tissue engineering.