Bioactive glass ceramic nanoparticles (nBGC) were synthesized by sol-gel process and characterized using FTIR, TEM and XRD. Composite scaffolds of chitosan (CS)-gelatin (CG) with nBGC were prepared by blending of chitosan and gelatin with nBGC. The prepared CG/nBGC nano-composite scaffolds were characterized using FUR, SEM and XRD. The effect of nBGC in the scaffold matrix was evaluated in terms of scaffold properties and biocompatibility. Our results showed macroporous internal morphology in the scaffold with pore size ranging from 150 to 300 mu m. Degradation and swelling behavior of the nano-composite scaffolds were decreased, while protein adsorption was increased with the addition of nBGC. Biomineralization studies showed higher amount of mineral deposits on the nano-composite scaffold. which increases with increasing time of incubation. MTT assay, direct contact test, and cell attachment studies indicated that, the nano-composite scaffolds are better in scaffold properties and it provides a healthier environment for cell attachment and spreading. So, the developed nano-composite scaffolds are a potential candidate for alveolar bone regeneration applications. (C) 2010 Elsevier B.V. All rights reserved.