Abstract Background Chitosan (CS) scaffolds combined with osteogenically induced bone marrow mesenchymal stem cells (BMSCs) have been proved to be promising substitutes for repairing bone defects. Nevertheless, the bone forming and scaffold biodegrading process are seldom studied. This study aimed to determine the osteogenic ability of chitosan/osteo-induced BMSCs composites via observing the bone forming process and explore the relationship between the bone formation and the scaffold biodegradation. Methods The CS/osteo-induced BMSCs composites (CS cells group) and the CS scaffolds (CS group) were respectively implanted into SD rat thigh muscles. At 2, 4, 6, 8, 12 weeks postoperatively, the rat femurs were scanned by CT, and the CT values of the implants were measured and comparatively analyzed. Subsequently the implants were harvested and underwent HE staining and Masson staining, and the percentages of bone area, scaffold area and collagen area were calculated and compared between two groups. Results The imaging results showed that the densities of implants of two groups gradually increased along with time, but the CT values of implants in the CS cells group were much higher than those in CS group at the same time point (P<0.05). The histological results showed that the de novo bone and collagen formed in the pores of the scaffolds and gradually increased since 2 weeks postoperatively in both two groups, and the scaffold gradually degraded along with the bone forming process. However, the comparative analysis results showed that the CS cells group gained more de novo bone and collagen formation, and remained less scaffold than the CS group at the same time point (P<0.05). Conclusions The CS/osteo-induced BMSCs composites are excellent bone tissue engineering substitutes, and the scaffold biodegradation is accordant with the bone formation.