Bone tissue engineering majorly focuses on the development of biomaterials which have the capability to mimic bone as well as the ability to induce bone formation. To this direction, we have prepared supermacroporous polyvinyl alcohol-TEOS-Agarose-CaCl2 (PTAgC) biocomposite cryogels having a uniform porous structure with an interconnected porosity of 77 ± 0.16 % and pore size of 190 ± 0.78 μm, as determined by scanning electron microscopic and micro-computed tomographic analyses. These biocomposite cryogels show an osteocompatible response towards Saos-2 human osteoblasts as analyzed via MTT [3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide] assay, alkaline phosphatase (ALP) assay and cell adhesion behaviour showing a flattened morphology of the cells on the cryogel surface. The property of bioactivity was also observed on the surface of these biomaterials. Further, we also explored the osteoinductive potential of these biocomposite cryogels by the analysis of osteogenic differentiation of C2C12 myoblasts after seeding onto these biocomposite cryogels. The results indicate that these biocomposite cryogels indeed show an osteoinductive potential as we could observe the presence of respective markers for different stages during osteoblast maturation. During early timepoints, higher alkaline phosphatase production via ALP assay and BCIP/NBT staining was observed in the case of biocomposite cryogel seeded cells suggesting the osteoblastic differentiation of C2C12 cells. Whereas, during later timepoints, formation of calcium-phosphate like crystals was confirmed by von-kossa staining, further indicating towards the onset of mineralization phase during osteoblast maturation. Therefore, these results suggest that PTAgC biocomposite cryogels can form an important part of bone tissue engineered biomaterials due to their osteocompatible behaviour and osteoinductive potential.