This study reports on the production of chitosan-based composite scaffolds reinforced with hydroxyapatite (HA) powders prepared with cerium oxide (CeO2) with various concentrations (10, 20, 30 wt.%). Besides, the effect of CeO2 additive on the microstructural, mechanical and bioactivity properties of the composite scaffolds was investigated. The CeO2 reinforced HA powders were synthesized having homogenous particle distribution via spray drying process. The synthesized powders and the produced scaffolds were examined using different characterization methods. From the results, it can be seen that the scaffolds were significantly affected by amount of CeO2 additive. An increase in the compressive strength is observed as the amount of CeO2 additive rises. Furthermore, the composite scaffolds possessed a high mineralization ability of apatite in simulated body fluid (SBF). These observations related to the composite scaffolds have considerable potency for application in bone tissue engineering.