Carbon nanotubes with unique physical and mechanical properties have shown great potential for biological applications, including tissue engineering and mimicking the structure and properties of human bones. In the present work, sol-gel synthesized nanocomposite powder of multi-wall carbon nanotube/hydroxyapatite characterized using field-emission scanning electron microscopy, transmission electron microscope, X-ray diffraction, Fourier transform infra-red spectroscopy and thermal analyses. The results show homogenous dispersion of nanotube in well-crystallized hydroxyapatite ceramic matrix. Scanning electron microscopy and transmission electron microscope observations show the sodium dodecyl sulfate-adsorbed multi-wall nanotube almost wrapped completely by crystals of hydroxyapatite that will help better integration of bone substitute materials with the surrounding bone tissue. Eventually, invitro study confirms the biocompatibility of composite powder comparable to monolithic hydroxyapatite.