Repair and regeneration of critical sized defects via the utilization of polymeric bone graft substitutes are challenges. Here, we introduce radially and axially graded multizonal bone graft substitutes fabricated from polycaprolactone (PCL), and PCL biocomposites with osteoconductive particles, that is, hydroxyapatite (HA), and β-tricalcium phosphate (TCP). The novel bone graft substitutes should provide a greater degree of freedom to the orthopedic surgeon especially for repair of critically sized bone defects. The modulus of the graft substitute could be tailored in the axial direction upon the systematic variation of the HA/TCP concentration, while in the radial direction the bone graft substitute consisted of an outer layer with high stiffness, encapsulating a softer core with greater porosity. The biocompatibility of the bone graft substitutes was investigated using in vitro culturing of human bone marrow-derived stromal cells followed by the analysis of cell proliferation and differentiation rates. The characterization of the tissue constructs included the enzymatic alkaline phosphates (ALP) activity, microcomputed tomography imaging, and polymerase chain reaction analysis involving the expressions of bone markers, that is, Runx2, ALP, collagen type I, osteopontin, and osteocalcin, overall demonstrating the differentiation of bone marrow derived stem cells (BMSCs) via osteogenic lineage and formation of mineralized bone tissue.