Novel porous bioactive hydroxyapatite (HAP) nanocrystallites were synthesized by auto-combustion technique. The texture properties of the HAP nanopowder were determined through series of characterization techniques. The thermal decomposition behaviour and required sintering temperature of citrate precursor to phase formation of the sample was checked by thermogravimetric analysis (TG-DTA). The hexagonal structure and porous nature of the material were estimated by using X-ray diffraction (XRD) and electron microscopy scanned with different magnifications. Phase formation of HAP was determined by FTIR technique. Transmission electron microscopic (TEM) study indicated the nanostructure of the ceramics, particle size was found to be 30 - 35 nm. These nanoparticles were evaluated for the qualitative and quantitative determination of different elements by energy-dispersive X-ray spectroscopy. In vitro MTT assays showed HAP nanopowder have good biocompatibility and promotes cell proliferation. This nanostructured HAP powder with enhanced biocompatibility can be potentially used as a material for bone tissue engineering.