Nano-composites that show some features of natural bone both in composition and in microstructure have been prepared by in situ precipitation method. Apatite phase has been prepared from cost-effective precursors (calcite and urea phosphate) within chitosan (CS) matrix dissolved in aqueous acetic acid solution. The compositional and morphological properties of composites were studied by means of Fourier transform infrared (FTIR) spectroscopy, X-ray diffraction (XRD) thermogravimetric analysis (TGA) and transmission electron microscopy (TEM). Depending on the reaction conditions (temperature, reaction time, glucose addition and pH control) in addition to hydroxyapatite (HA) as a major phase, octacalcium hydrogen phosphate pentahydrate (OCP) and dicalcium phosphate anhydrate (DCPD) were formed as shown by XRD and FTIR. Crystallite lengths of precipitated HA estimated by Scherrer's equation were between 20 and 30 nm. A fibrous morphology (~400 nm) of HA observed by TEM indicates that HA nucleates on chitosan chains.