Bone is a nanocomposite composed of organic (mainly collagen) and inorganic (nanocrystalline hydroxyapatite) components, with a hierarchical structure ranging from nano- to macroscale. Its functions include providing mechanical support and transmitting physio-chemical and mechano-chemical cues. Clinical repair and reconstruction of bone defects has been conducted using autologous and allogeneic tissues and alloplastic materials, with functional limitations. The design and development of biomaterial scaffolds that will replace the form and function of native tissue while promoting regeneration without necrosis or scar formation is a challenging area of research. Nanomaterials and nanocomposites are promising platforms to recapitulate the organization of natural extracellular matrix for the fabrication of functional bone tissues because nanostructure provides a closer approximation to native bone architecture. Nanostructured scaffolds provide structural support for the cells and regulate cell proliferation, differentiation, and migration, which results in the formation of functional tissues. Unique properties of nanomaterials, such as increased wettability and surface area, lead to increased protein adsorption when compared with conventional biomaterials. Cell–scaffold interactions at the cell–material nanointerface may be mediated by integrin-triggered signaling pathways that affect cell behavior. The materials selection and processing techniques can affect the chemical, physical, mechanical, and cellular recognition properties of biomaterials. In this article, we focused on reviewing current fabrication techniques for nanomaterials and nanocomposites, their cell interaction properties and their application in bone tissue engineering and regeneration. © 2012 Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater, 2013.