The essence of this investigation is to explore MWCNTs as reinforcing agents to strengthen Hap-Gel nanocomposites for artificial bone grafting applications without significantly compromising their biocompatibility. Hap-Gelatin composites, reinforced with various proportions of MWCNTs, were synthesized to optimize the MWCNT content in the composites which yield commendable improvement in the strength. The morphological studies reveal that the MWCNTs act as templates for nucleation of Hap crystals. The biocompatibility of MWCNT reinforced Hap-Gelatin composites were evaluated in animal model through the histopathological investigation of tissues from skin, kidney, and liver. On histopathological examination, no noticeable alteration due to toxicity was found for lower concentration of MWCNTs. Mild reversible changes in the liver and tubular damage in kidney have been observed for higher concentration (4 wt % of MWCNTs). It can be inferred from the findings that MWCNTs, in proportions less than 4%, can successfully be used to reinforce the Hap-Gel nanocomposite to improve its mechanical properties. However, how safe would these CNT reinforced bone implants would be when used for prolonged period in actual physiological conditions needs to be investigated further.