A combination of elastic poly(butylene succinate-co-ethylene terephthalate) and rigid nano-hydroxyapatite were used to prepare an in-situ synthesized nanocomposite mimicing bone structure. The microstructure, morphology, and dispersion of nanoparticles in the nanocomposites were studied using proton nuclear magnetic resonance ((HNMR)-H-1), scanning electron microscope (SEM), and transmission electron microscopy (TEM), respectively. Then, electrospinning method was used to produce nanofiber matrix with lowest fiber diameter. Presence of chemical bonds among nanoparticles and polymer leads to the excellent particle dispersion and solution phase stability. SEM results show that continuous and bead-free nanofibers were produced and incorporating nanoparticle slightly increased fibers diameter. Elastic modulus, tensile strength, crystallinity, hydrophilicity and hydrolytic degradability of resulted nanofiber increased with nanoparticle but elongation at break slightly decreased. Proliferation and osteogenic differentiation of human mesenchymal stem cell significantly improved by introducing nanoparticle which indicate that electrospun nanofibers could be used as scaffolds for bone tissue engineering. (C) 2017 Wiley Periodicals, Inc.