In this study for the first time, we compared physico-chemical and biological properties of polycaprolactone-gelatin-hydroxyapatite scaffolds of two types: one in which the nano-hydroxyapatite (n-HA) was deposited on the surface of electrospun polycaprolactone-gelatin (PCG) fibers via alternate soaking process (PCG-HA(AS)) and other in which hydroxyapatite (HA) powders were blended in electrospinning solution of PCG (PCG-HA(B)). The microstructure of fibers was examined by scanning electron microscopy (SEM) and transmission electron microscopy (TEM) which showed n-HA particles on the surface of the PCG-HA(AS) scaffold and embedded HA particles in the interior of the PCG-HA(B) fibers. PCG-HA(AS) fibers exhibited the better Young's moduli and tensile strength as compared to PCG-HA(B) fibers. Biological properties such as cell proliferation, cell attachment and alkaline phosphatase activity (ALP) were determined by growing human osteosarcoma cells (MG-63) over the scaffolds. Cell proliferation and confocal results clearly indicated that the presence of hydroxyapatite on the surface of the PCG-HA(AS) scaffold promoted better cellular adhesion and proliferation as compared to PCG-HA(B) scaffold. ALP activity was also observed better in alternate soaked PCG scaffold as compared to PCG-HA(B) scaffold. Mechanical strength and biological properties clearly demonstrate that surface deposited HA scaffold prepared by alternate soaking method may find application in bone tissue engineering. (C) 2013 Elsevier B.V. All rights reserved.