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The current gold standard for traumatic bone injury is autograft. Harvesting this graft material requires additional surgery, leading to potential complications and added pain and discomfort for the patient. As an alternative, allografts, or tissue taken from cadavers, have been used but also possess additional concerns of potential disease transmission. Tissue engineering has shown great promise as a viable alternative to current bone graft solutions due to its use of biocompatible, biodegradable scaffolds as support systems for cellular attachment, proliferation, migration, and maintenance of normal phenotypic expression. Towards this end, a biodegradable composite scaffold has been developed from poly(lactide-co-glycolide) and calcium phosphate in which calcium phosphate was synthesized in situ within the scaffold. Several parameters were investigated to control microsphere formation, calcium phosphate synthesis, and scaffold structure. Calcium phosphate synthesis within the forming microspheres was largely dependent on solution pH and polymer:ceramic ratio, but less so on duration of mixing and temperature of solution. Scaffold structure and strength were found to be dependent on temperature of microsphere formation and heating time of microspheres to form the scaffold. In vitro degradation studies demonstrated the mechanical integrity and bioactivity of the scaffold through its ability to encourage mineral deposition on its surface. Scaffolds delivered calcium ions to the surrounding solution which in turn influenced the overall mass of the scaffold, pH of surrounding fluid, and reprecipitation of calcium phosphate on the scaffold surface. Cellular evaluation demonstrated this scaffold to be biocompatible and osteoconductive, with evidence of cellular proliferation and migration throughout the scaffold, early alkaline phosphatase and osteocalcin expression from cells seeded on composite scaffolds, and evidence of type I collagen synthesis. In vivo animal studies in male New Zealand white rabbits showed that composite scaffolds provided a suitable structure for new cellular infiltration throughout the scaffold pore structure. Composite scaffolds also supported the vascularization of new tissue within the defect site, as well as newly mineralized bone tissue at the margins of the defect. The work described herein provides strong evidence for the potential of this composite scaffold as a bone graft substitute, and paves the way for future developmental work.