To meet the challenge of regenerating bone lost to disease or trauma, biodegradable scaffolds are being investigated as a way to regenerate bone without the need for an auto- or allograft. Here, we have developed a novel microsphere-based chitosan/nanocrystalline calcium phosphate (CaP) composite scaffold and investigated its potential compared to plain chitosan scaffolds to be used as a bone graft substitute. Composite and chitosan scaffolds were prepared by fusing microspheres of 500-900 microm in diameter, and porosity, degradation, compressive strength, and cell growth were examined. Both scaffolds had porosities of 33-35% and pore sizes between 100 and 800 . However, composite scaffolds were much rougher and, as a result, had 20 times more surface area/unit mass than chitosan scaffolds. The compressive modulus of hydrated composite scaffolds was significantly higher than chitosan scaffolds (9.29 +/- 0.8 MPa vs. 3.26 +/- 2.5 MPa), and composite scaffolds were tougher and more flexible than what has been reported for other chitosan-CaP composites or CaP scaffolds alone. Using X-ray diffraction, scaffolds were shown to contain partially crystalline hydroxyapatite with a crystallinity of 16.7% +/- 6.8% and crystallite size of 128 +/- 55 nm. Fibronection adsorption was increased on composite scaffolds, and cell attachment was higher on composite scaffolds after 30 min, although attachment rates were similar after 1 h. Osteoblast proliferation (based on dsDNA measurements) was significantly increased after 1 week of culture. These studies have demonstrated that composite scaffolds have mechanical properties and porosity sufficient to support ingrowth of new bone tissue, and cell attachment and proliferation data indicate composite scaffolds are promising for bone regeneration.