To tailor polycaprolactone (PCL) surface properties for biomedical applications, film samples of PCL were surface modified by the active screen plasma nitriding (ASPN) technique. The chemical composition and structure were characterized by Fourier transform infrared spectroscopy and X-ray photoelectron spectroscopy. The wettability of the surface modified polymers was investigated by contact angle and surface energy methods. Biocompatibility of the prepared PCL samples was evaluated in vitro using MC3T3-E1 osteoblast-like cells. The degradability was assessed by determining the self-degradation rate (catalyzed by lipase). The results show that ASPN surface modification can effectively improve osteoblast cell adhesion and spreading on the surface of PCL. The main change in chemical composition is the exchange of some carboxyl groups on the surface for hydroxyl groups. The active-screen plasma nitriding technique has been found to be an effective and practical method to effectively improve osteoblast cell adhesion and spreading on the PCL surface. Such changes have been attributed to the increase in wettablity and generation of new hydroxyl groups by plasma treatment. After active-screen plasma treatment, the PCL film is still degradable, but the enzymatic degradation rate is slower compared with untreated PCL film. © 2011 Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater 100B: 314–320, 2012.