Recent years saw a growing number of research papers on electrospun nanofibers for bone regeneration. Our hypothesis is that the electrospun nanofibers need further tailoring at sub-micron length scales to mimic the natural bone for enhanced biocompatibility and bone regeneration. We nano-engineered electrospun fibers via nanocomposite of Polycaprolactone (PCL) and nano-Hydroxyappatite (nHAP). The nHAP is synthesized via a hybrid method, hydrothermal process followed by microwave irradiation. The fiber morphology was characterized by scanning electron microscopy (SEM) while its composition by energy dispersive X-ray analysis (EDX), ATR-Fourier transform infrared spectroscopy (ATR-FTIR), powder X-ray diffraction (XRD) and Contact angle (CA) measurement. The scaffolds showed a nano- porous architecture and incorporation of nHAP in the nanofibers. There was uniformity in the size of the fibres and were randomly aligned. Cell culture studies with MG63 cells shows increased proliferation on the composite scaffold. The study reveals that the PCL-nHAP composite fiber mat showed a nano- porous environment for better cell adhesion and containing nHAP is osteogenic and can serve as a potential bone graft material.