Allograft bone, dematerialized bone matrix and calcium-based synthetic materials have long been used as bone graft substitutes. First-generation bone graft substitutes as stand-alone graft substitutes have not developed as hoped. It remains a great challenge to design an ideal bone graft that emulates nature's own structures or functions. To further improve the performance of such bone graft substitutes, scientists are investigating biomimetic processes to incorporate the desirable nano-features into the next generation of biomaterials. In this regard, nanostructured biomaterials less than 100 nm in at least one dimension, in particular nanocomposites, are perceived to be beneficial and potentially ideal for bone applications, owing to their nanoscale functional characteristics that facilitate bone cell growth and subsequent tissue formation. In fact, bone itself is a nanocomposite system with a complex hierarchical structure. This review reports the impact of biomimetically derived nanocomposite biomaterials for use in bone applications and provides possible suggestions for future research and development. © 2006 Future Medicine Ltd.