The present study reports the fabrication of Xylan/Chitosan/Montmorillonite (MMT) composite scaffold by freeze drying process with the aim of achieving improved properties for bone tissue engineering applications. The scaffolds were characterized using Fourier transform infrared spectroscopy (FT-IR), X-ray diffraction (XRD), Scanning electron microscopy (SEM) and mechanical testing. The fabricated scaffolds were found to be highly porous with variations in pore size (102 μm–290 μm) on varying the filler concentration. XRD study revealed complete exfoliation of MMT incorporated in polymer conjugates (Xylan/Chitosan) prepared by Maillard reaction. In-vitro bio-mineralization study revealed significant apatite deposition on polymer matrix. Scaffolds with 5% MMT concentration exhibited needle like morphology of deposited apatite which can further provide synergistic response in increasing the mechanical properties of scaffolds when placed in contact with body fluid. The average length and thickness of apatite needles were calculated to be 140 μm and 1.2 μm respectively. The deposited apatite crystals on scaffold with 2% MMT content demonstrated Ca/P ratio of 1.67, resembling that of natural bone apatite. Swelling and biodegradation behavior of scaffold were also studied with regard to hydrophilic and barrier effect of MMT on composites. MTT assay revealed non-cytotoxic nature of scaffold with good cell viability.