In the current work, monetite (DCPA) nanoparticles incorporated chitosan (CH)‐based composite was prepared using by electrospinning technique. A smooth and defect‐free fibrous matrix with an average fiber diameter in the range between 311 ± 13 to 380 ± 28 nm was obtained for 5 wt% (CH‐DCPA5) and 7 wt% DCPA (CH‐DCPA7) containing electrospun scaffolds. The results indicated that the addition of 7 wt% DCPA nanoparticles to chitosan caused an increase in the tensile strength of scaffolds from 6.2 to 12.34 MPa. A slow degradation rate (~37% in 28 days) indicates its suitability for bone tissue regeneration. A study on the biomineralization capability of the electrospun scaffolds after their immersion in simulated body fluid in vitro revealed that the addition of DCPA strongly promoted the deposition of the apatite layer onto electrospun nanofibrous scaffolds. The culture of MG‐63 osteoblast cells on the scaffolds demonstrated that the incorporation of DCPA nanoparticles into the chitosan polymeric matrix helped in the adhesion, spreading, and migration of cells. CH‐DCPA5 and CH‐DCPA7 scaffolds exhibited a higher capacity to proliferate osteoblast cell lines as compared to pure CH scaffold as confirmed by MTT assay and qualitative cell viability analysis from fluorescence microscopy. Immunocytochemistry analysis for osteocalcin expression revealed a higher capacity of DCPA‐containing scaffolds to differentiate MG‐63 cells into bone lineage as compared to pure chitosan scaffolds. DCPA incorporation into chitosan also resulted in MG‐63 cultured on to it to elicit higher alkaline phosphatase activity suggesting the highest capacity of CH‐DCPA7 to differentiate MG 63 cell line among all the scaffolds studied here. The results indicated superior osteogenic properties of DCPA nanoparticle reinforced chitosan matrix for use in BTE in the form of nanofibrous scaffolds.