Tricomponent scaffold systems prepared by natural materials especially of marine origin are gaining much attention nowadays for the application in bone tissue engineering. A novel scaffold (Chi-HAp-MSCol) containing chitosan (Chi), hydroxyapatite (HAp) derived from Thunnus obesus bone and marine sponge (Ircinia fusca) collagen (MSCol) was prepared using freeze-drying and lyophilization method. This biomimetic scaffold, along with the Chi and Chi-HAp scaffolds were characterized biophysicochemically for their comparative significance in bone grafting applications. The structural composition of the chitosan, Chi-Hap, and Chi-HAp-MSCol scaffolds were characterized by Fourier Transform Infrared spectroscopy. The porosity, water uptake, and retention abilities of the composite scaffolds decreased, whereas Thermogravimetric and Differential Thermal Analyses results revealed the increase in thermal stability in the scaffold because of the highly stable HAp and MSCol. Homogeneous dispersion of HAp and MSCol in chitosan matrix with interconnected porosity of 60–180 μm (Chi-HAp) and 50–170 μm (Chi-HAp-MSCol) was observed by Scanning Electron Microscopy, X-ray diffraction, and optical microscopy. Cell proliferation in composite scaffolds was relatively higher than pure chitosan when observed by MTT assay and Hoechst staining in vitro using MG-63 cell line. These observations suggest that the novel Chi-HAp-MSCol composite scaffolds are promising biomaterials for matrix-based bone repair and bone augmentation. © 2011 Wiley Periodicals, Inc. J Biomed Mater Res Part A, 2012.