Among conventional fabrication techniques, freeze-drying process has widely been investigated for polymeric implants. However, the understanding of the stem cell progenitor-dependent cell functionality modulation and quantitative analysis of early osseointegration of highly porous scaffolds have not been explored. Here, we developed a novel, highly porous, multimaterial composite, chitosan/hydroxyapatite/polycaprolactone (CHT/HA/PCL). The in vitro studies have been performed using mesenchymal stem cells (MSCs) from three tissue sources: human bone marrow-derived MSCs (BM-MSCs), adipose-derived MSCs (AD-MSCs), and Wharton's jelly-derived MSCs (WJ-MSCs). Although cell attachment and metabolic activity [3-4,5dimethylthiazol-2yl-(2,5 diphenyl-2H-tetrazoliumbromide) assay] were ore enhanced in WJ-MSC-laden CHT/HA/PCL composites, scanning electron microscopy, real-time gene expression (alkaline phosphatase [ALP], collagen type I [Col I], osteocalcin [OCN], and bone morphogenetic protein 4 [BMP-4]), and immunostaining (COL I, β-CATENIN, OCN, and SCLEROSTIN [SOST]) demonstrated pronounced osteogenesis with terminal differentiation on BM-MSC-laden CHT/HA/PCL composites only. The enhanced cell functionality on CHT/HA/PCL composites was explained in terms of interplay among the surface properties and the optimal source of MSCs. In addition, osteogenesis in rat tibial model over 6 weeks confirmed a better ratio of bone volume to the total volume for BM-MSC-laden composites over scaffold-only and defect-only groups. The clinically conformant combination of 3D porous architecture with pore sizes varying in the range of 20-200 μm together with controlled in vitro degradation and early osseointegration establish the potential of CHT/HA/PCL composite as a potential cancellous bone analog.