The electrospinning technique allows engineering biomimetic scaffolds within micro to nanoscale range mimicking natural extracellular matrix (ECM). Chitosan (CS) and polycaprolactone (PCL) were dissolved in a modified solvent mixture consisting of formic acid and acetone (3:7) and mixed in different weight ratios to get chitosan-polycaprolactone [CS-PCL] blend solutions. The CS-PCL blend polymer was electrospun in the same solvent system and compared with PCL. The physicochemical characterization of the electrospun fibrous mats was done using scanning electron microscopy (SEM), Fourier transform infrared spectroscopy (FTIR), tensile test, swelling properties, water contact angle (WCA) analysis, surface profilometry and thermo gravimetric analysis (TGA). The CS-PCL fibrous mat showed decreased hydrophobicity. The CS-PCL mats also showed improved swelling property, tensile strength, thermal stability and surface roughness. The cytocompatibility of the CS-PCL and PCL fibrous mats were examined using mouse fibroblast (L-929) cell line by direct contact and cellular activity with extract of materials confirmed non-cytotoxic nature. The potential of CS-PCL and PCL fibrous mats as skin tissue engineering scaffolds were assessed by cell adhesion, viability, proliferation and actin distribution using human keratinocytes (HaCaT) and L-929 cell lines. Results indicate that CSPCL is a better scaffold for attachment and proliferation of keratinocytes and is a potential material for skin tissue engineering.