This paper reports an in situ diffusion method for the fabrication of compositionally graded collagen/nanohydroxyapatite (HA) composite scaffold. The method is diffusion based and causes the precipitation of nano-HA crystallites in situ. A collagen matrix acts as a template through which calcium ions (Ca(2+)) and phosphate ions (PO4(3-)) diffuse and precipitate a non-stoichiometric HA. It was observed that needle-like prismatic nano-HA crystallites (about 2 x 2 x 20 nm) precipitated in the interior of the collagen template onto the collagen fibrils. Chemical and microstructural analysis revealed a gradient of the Ca to P ratio across the width of the scaffold template, resulting in the formation of a Ca-rich side and a Ca-depleted side of scaffold. The Ca-rich side featured low porosity and agglomerates of the nano-HA crystallites, while the Ca-depleted side featured higher porosity and nano-HA crystallites integrated with collagen fibrils to form a porous network structure.