We describe here the structure–property–process relationship of two sets of chitosan-based scaffolds as potential materials for hard tissue bioengineering applications. The first set of scaffolds was designed to study the effect of degree of deacetylation (%DD) of chitosan at 85 and 95% DD with identical molecular weight. The second set of scaffolds were synthesized to enhance the bioactivity and mechanical properties of 95% DD chitosan scaffold by the addition of 1, 3, and 5 wt% nanohydroxyapatite (nHA). Both sets of scaffolds were processed using freezing and lyophilization and their in vitro biological response was examined using pre-osteoblast (MC 3T3-E1) cells. The pure chitosan and chitosan–nHA nanocomposite scaffolds were characterized by a three-dimensional porous structure with pore size in the range of (≈50–120 µm), irrespective of %DD and nHA content. The compression modulus of hydrated 95% DD chitosan scaffolds increased from 6.0 kPa in pure chitosan to 9.2 kPa in chitosan-5 wt% nHA. The water uptake ability of 95% DD chitosan scaffolds was lower than 85% DD chitosan scaffolds, and decreased with the addition of nHA. On the other hand the water retention ability of 95% DD chitosan scaffolds was greater than 85% DD chitosan scaffolds but did not increase much with the addition of nHA. Chitosan degrades mainly by lysozyme present in physiological fluid. After 28 days of in vitro biodegradation test with physiological fluid, the 95% DD chitosan exhibited slightly lower degradation rate as compared to 85% DD and the degradation decreased with increase in nHA content in chitosan scaffold. Pre-osteoblasts (MC3T3-E1) grown on nHA scaffolds showed improved cell attachment, more proliferation, and a more extended cellular morphology. In vitro experimental observations suggest chitosan–nHA nanocomposite scaffolds as potential biomaterials for hard tissue bioengineering (bone regeneration) or as a template for cell attachment and proliferation in the repair of osseous and chondral defects.