Hydroxyapatite (HA) is a promising material for bone tissue engineering as its chemistry and structure resembles the mineral component of bone tissue. HA particle size and shape influences the biological outcome of tissue repair. Increasing applications of HA nanoparticles in the field of orthopedics and dentistry have been noted due its biocompatibility, bioactivity, and osteoconductive properties. Addition of HA nanoparticles to biomaterials can enhance the surface properties of the nanocomposite leading to cellular adhesion, migration, proliferation, as well as endogenous cell signaling. We have investigated a biological role of HA nanoparticles, particularly whether a nanocomposite can augment endogenous osteogenic signaling among an embedded osteoprogenitor (OP) cell population within a cyclic acetal biomaterial. Cyclic acetal biodegradable materials are a novel class of materials which degrade into nonacidic and cytocompatible products, critical for maintaining endogenous signaling. We have synthesized nanocomposites consisting of HA nanoparticles (20-70nm, 100nm, 500nm) incorporated within cyclic acetal hydrogels for bone tissue engineering applications. We hypothesize that creation of such nanocomposites can provide a cell scaffold environment to enhance OP cell proliferation and differentiation by facilitating molecular signaling. The objectives of this study are to (1) investigate material properties and cell viability of nanocomposites fabricated by HA nanoparticles of varying sizes within cyclic acetal hydrogels and (2) to determine whether encapsulated OP cells can promote expression of bone morphogenetic protein-2 (BMP-2) within these three-dimensional nanocomposites. Cyclic acetal hydroxyapatite nanocomposites (6x2mm discs, 20-70nm, 100nm, 500nm) were fabricated by preparing six solutions of 5-ethyl-5-(hydroxymethyl)-β,β-dimethyl-1,3-dioxane-2-ethanol diacrylate : poly(ethylene glycol) diacrylate (EHD:PEGDA) and incorporating into each 50 and 0ng/ml HA nanoparticles. Distribution of HA nanoparticles within the nanocomposites was assayed using Field Emission Environmental Scanning Electron Microscope (FE-ESEM). Rat bone marrow stromal cell viability was assayed after 1 week culture in HA/cyclic acetal nanocomposites (50 and 0ng/ml HA in cyclic acetal, 6x2mm). Endogenous expression of BMP-2 was measured at the mRNA level. This study describes a novel nanocomposite and demonstrates that HA nanoparticles may promote osteogenic signaling within the biomaterial.