Cells respond to physiological mechanical stresses especially during early fetal development. Adopting a biomimetic approach, it is necessary to develop bioreactor systems to explore the effects of physiologically relevant mechanical strains and shear stresses for functional tissue growth and development. This study introduces a multimodal bioreactor system that allows application of cyclic compressive strains on premature bone grafts that are cultured under biaxial rotation (chamber rotation about 2 axes) conditions for bone tissue engineering. The bioreactor is integrated with sensors for dissolved oxygen levels and pH that allow real-time, non-invasive monitoring of the culture parameters. Mesenchymal stem cells-seeded polycaprolactone-β-tricalcium phosphate scaffolds were cultured in this bioreactor over 2weeks in 4 different modes-static, cyclic compression, biaxial rotation, and multimodal (combination of cyclic compression and biaxial rotation). The multimodal culture resulted in 1.8-fold higher cellular proliferation in comparison with the static controls within the first week. Two weeks of culture in the multimodal bioreactor utilizing the combined effects of optimal fluid flow conditions and cyclic compression led to the upregulation of osteogenic genes alkaline phosphatase (3.2-fold), osteonectin (2.4-fold), osteocalcin (10-fold), and collagen type 1 α1 (2-fold) in comparison with static cultures. We report for the first time, the independent and combined effects of mechanical stimulation and biaxial rotation for bone tissue engineering using a bioreactor platform with non-invasive sensing modalities. The demonstrated results show leaning towards the futuristic vision of using a physiologically relevant bioreactor system for generation of autologous bone grafts for clinical implantation.