The study aimed to explore the potential of magnesium hydroxide (Mg[OH]₂) nanoparticles (NPs) incorporated into polyurethane (PU) fibers, which were further coated with chitosan and silver (Ag) NPs. The hydrothermal approach was adopted to add the properties of chitosan and Ag NPs to the as‐spun fibers. These samples were characterized by field emission scanning electron microscope (FE‐SEM), EDS, Fourier transform infrared spectroscopy, thermogravimetric analysis, and contact angle measurements. The diameter of concocted fibers was found to be 0.79 ± 0.31 μm to 2.5 ± 0.9 μm. The presence of Mg(OH)2 decreased the fiber diameter from 2.05 ± 1.2 μm to 0.79 ± 0.31 μm; however, after hydrothermal coating, the diameter increased from 0.79 ± 0.31 μm to 2.5 ± 0.9 μm. The contact angle on pristine PU showed 105.53 ± 0.8°, that is, hydrophobicity, which was diminished to 9.3 ± 0.8° by the reorientation of PU with Mg(OH)2, chitosan and Ag NPs, that is, indicative of hydrophilic character. Biomineralization was evaluated by incubating in simulated body fluid, and the EDS and FE‐SEM indicated that composite fibers could induce apatite formation. Cell viability was measured using MTT assay, and cell adhesion/proliferation was confirmed by DAPI staining and FE‐SEM. The composite scaffolds promoted 3T3‐L1 to grow confluently.