A novel bioactive bone substitute with improved osteoblastic performance and effective antibacterial activity was developed, using a completely new approach based on samarium (Sm3+) doped P2O5 glass-reinforced hydroxyapatite composites (GR-HA). The composites were prepared by adding 2.5% (w/w) of the P2O5 glass to 97.5% (w/w) of HA. Four composites were developed, i.e. one non-doped composite, and three Sm3+ doped composites prepared with the P2O5 glass containing 0.5, 1 and 2 (mol%) of Sm2O3. The composites were labeled as GR-HA_control, GR-HA_0.5Sm, GR-HA_1Sm and GR-HA_2Sm. The composites were physicochemical and mechanically characterized, namely performing SEM, EDS and XRD analysis and flexural bending strength (FBS) assessment. The incorporation of Sm3+ in the GR-HA matrix resulted in the presence of a residual Sm3+ containing phase besides HA, β-TCP and α-TCP phases, increased surface hydrophilicity and slightly higher FBS. Sm3+ doped composites exhibited improved osteoblastic cell response, as evidenced by a better F-actin cytoskeleton organization and higher cell proliferation and expression of relevant osteoblastic genes. In addition, adhesion of Staphylococcus aureus and Staphylococcus epidermidis was greatly reduced on these composites. The improved osteoblastic behavior and the antibacterial effects were dependent on the amount of Samarium in the composite, this being particularly evident in the composite with a higher Sm3+ content. Therefore, the developed composite GR-HA_2Sm appears as a successful bone substitute with osteoconductive and antibacterial properties.