An experimental analysis of the mechanical properties of maleic anhydride compatibilized high density polyethylene-chitosan composites plasticized with palm oil were investigated. The effect of chitosan as filler (0, 2.5, 5, 7.5 and 10 wt%) on the mechanical properties of the injection moulded samples and its comparison with the corresponding palm oil plasticized with the optimised composite system has been performed. The mechanical properties of the melt mixed composites were studied and compared. An increase of 11.3 % in tensile strength, 9.4% in impact strength and 44.4 % increase in Young's modulus for 5 wt% chitosan loaded composite system was obtained when compared with the neat HDPE system. Furthermore, the addition of 5 wt% palm oil to the optimised system increased its impact strength to 102 kJ/m2 when compared to the neat high density polyethylene system without chitosan. The improved compatibility between high density polyethylene and chitosan has been further confirmed through the morphological analysis. Finite element analysis of the tensile properties showed comparable values with the experimental values within acceptable error limits. This study led to the development of a bio-based material having better mechanical performance which can be used in bone-tissue engineering applications.