The use of polycaprolactone (PCL) as a biomaterial, especially in the fields of drug delivery and tissue engineering, has enjoyed significant growth. Understanding how such a device or scaffold eventually degrades in vivo is paramount as the defect site regenerates and remodels. Degradation studies of three-dimensional PCL and PCL-based composite scaffolds were conducted in vitro (in phosphate buffered saline) and in vivo (rabbit model). Results up to 6 months are reported. All samples recorded virtually no molecular weight changes after 6 months, with a maximum mass loss of only about 7% from the PCL-composite scaffolds degraded in vivo, and a minimum of 1% from PCL scaffolds. Overall, crystallinity increased slightly because of the effects of polymer recrystallization. This was also a contributory factor for the observed stiffness increment in some of the samples, while only the PCL-composite scaffold registered a decrease. Histological examination of the in vivo samples revealed good biocompatibility, with no adverse host tissue reactions up to 6 months. Preliminary results of medical-grade PCL scaffolds, which were implanted for 2 years in a critical-sized rabbit calvarial defect site, are also reported here and support our scaffold design goal for gradual and late molecular weight decreases combined with excellent long-term biocompatibility and bone regeneration.