Natural polymer-based hydrogels have been widely applied in bone tissue engineering due to their excellent biocompatibility and outstanding ability of drug encapsulation. However, they have relatively weak mechanical properties and lack bioactivity. Hence, we developed a bioactive nanoparticle composite hydrogel by incorporating LAPONITE®, which is an osteo-inductive inorganic nanoparticle. The incorporation of the nanoparticle significantly enhanced its mechanical properties. In vitro evaluation indicated that the nanocomposite hydrogel could exhibit good biocompatibility. Besides, the nanocomposite hydrogel was proved to have excellent osteogenic ability with up-regulated expression of osteogenic markers such as type I collagen (COL-I), runt-related transcription factor-2 (Runx-2) and osteocalcin (OCN). Furthermore, the in vivo study confirmed that the composite nanocomposite hydrogel could significantly promote new bone formation, providing a prospective strategy for bone tissue regeneration.