Tissue engineering offers a significant potential alternative to conventional methods for rectifying tissue defects by evoking natural regeneration process via interactions between cells and 3D porous scaffolds. Imparting adequate mechanical properties to biodegradable scaffolds for bone tissue engineering is an important challenge and extends from molecular to macroscale. This work focuses on the use of sodium montmorillonite (Na-MMT) to design polymer composite scaffolds having enhanced mechanical properties along with multiple interdependent properties. Materials design beginning at the molecular level was used in which Na-MMT clay was modified with three different unnatural amino acids and further characterized using Fourier Transform Infrared (FTIR) spectroscopy, X-ray diffraction (XRD). Based on improved bicompatibility with human osteoblasts (bone cells) and intermediate increase in d-spacing of MMT clay (shown by XRD), 5-aminovaleric acid modified clay was further used to prepare biopolymer (chitosan-polygalacturonic acid complex) scaffolds. Osteoblast proliferation in biopolymer scaffolds containing 5-aminovaleric acid modified clay was similar to biopolymer scaffolds containing hydroxyapatite (HAP). A novel process based on biomineralization in bone was designed to prepare 5-aminovaleric acid modified clay capable of imparting multiple properties to the scaffolds. Bone-like apatite was mineralized in modified clay and a novel nanoclay-HAP hybrid (in situ HAPclay) was obtained. FTIR spectroscopy indicated a molecular level organic-inorganic association between the intercalated 5-aminovaleric acid and mineralized HAP. Osteoblasts formed clusters on biopolymer composite films prepared with different weight percent compositions of in situ HAPclay. Human MSCs formed mineralized nodules on composite films and mineralized extracellular matrix (ECM) in composite scaffolds without the use of osteogenic supplements. Polycaprolactone (PCL), a synthetic polymer, was used for preparing composites (films and scaffolds) containing in situ HAPclay. Composite films showed significantly improved nanomechanical properties. Human MSCs formed mineralized ECM on films in absence of osteogenic supplements and were able to infiltrate the scaffolds. Atomic force microscopy imaging of mineralized ECM formed on composite films showed similarities in dimensions, arrangement of collagen and apatite with their natural bone counterparts. This work indicates the potential of in situ HAPclay to impart polymeric scaffolds with osteoinductive, osteoconductive abilities and improve their mechanical properties besides emphasizing nanoclays as cell-instructive materials.