Bone loss during trauma, surgeries, and tumor resection often results in critical-sized bone defects that need to be filled with substitutionary materials. Complications associated with conventional grafting techniques have led to the development of bioactive tissue-engineered bone scaffolds. The potential application of hydrogels as three-dimensional (3D) matrices in tissue engineering has gained attention in recent years because of the superior sensitivity, injectability, and minimal invasive properties of hydrogels. Improvements in the bioactivity and mechanical strength of hydrogels can be achieved with the addition of ceramics. Based on the features required for bone regeneration, an injectable thermosensitive hydrogel containing zinc-doped chitosan/nanohydroxyapatite/beta-glycerophosphate (Zn-CS/nHAp/β-GP) was prepared and characterized, and the effect of nHAp on the hydrogel was examined. Hydrogels (Zn-CS/β-GP, Zn-CS/nHAp/β-GP) were prepared using the sol–gel method. Characterization was carried out by scanning electron microscopy (SEM), energy dispersive spectroscopy (EDX), Fourier transform infrared spectroscopy (FTIR), and X-ray diffraction (XRD) as well as swelling, protein adsorption, and exogenous biomineralization studies. Expression of osteoblast marker genes was determined by real-time reverse transcriptase polymerase chain reaction (RT-PCR) and western blot analyses. In vivo bone formation was studied using a rat bone defect model system. The hydrogels exhibited sol–gel transition at 37°C. The presence of nHAp in the Zn-CS/nHAp/β-GP hydrogel enhanced swelling, protein adsorption, and exogenous biomineralization. The hydrogel was found to be non-toxic to mesenchymal stem cells. The addition of nHAp to the hydrogel also enhanced osteoblast differentiation under osteogenic conditions in vitro and accelerated bone formation in vivo as seen from the depositions of apatite and collagen. The synthesized injectable hydrogel (Zn-CS/nHAp/β-GP) showed its potential toward bone formation at molecular and cellular levels in vitro and in vivo. The current findings demonstrate the importance of adding nHAp to the hydrogel, thereby accelerating potential clinical application toward bone regeneration.