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A bone graft is a complicated structure that provides mechanical support and biological signals that regulate bone growth, reconstruction, and repair. A single-component material is inadequate to provide a suitable combination of structural support and biological stimuli to promote bone regeneration. Multicomponent composite biomaterials lack adequate bonding among the components to prevent phase separation after implantation. We have previously developed a novel multistep polymerization and fabrication process to construct a nano-hydroxyapatite-poly(D,L-lactide-co-glycolide)-collagen biomaterial (abbreviated nHAP-PLGA-collagen) with the components covalently bonded to each other. In the present study, the mechanical properties and osteogenic potential of nHAP-PLGA-collagen are characterized to assess the material's suitability to support bone regeneration. nHAP-PLGA-collagen films exhibit tensile strength very close to that of human cancellous bone. Human mesenchymal stem cells (hMSCs) are viable on 2D nHAP-PLGA-collagen films with a sevenfold increase in cell population after 7 days of culture. Over 5 weeks of culture, hMSCs deposit matrix and mineral consistent with osteogenic differentiation and bone formation. As a result of matrix deposition, nHAP-PLGA-collagen films cultured with hMSCs exhibit 48% higher tensile strength and fivefold higher moduli compared to nHAP-PLGA-collagen films without cells. More interestingly, secretion of matrix and minerals by differentiated hMSCs cultured on the nHAP-PLGA-collagen films for 5 weeks mitigates the loss of mechanical strength that accompanies PLGA hydrolysis.