Sustained delivery of growth factors has emerged as an essential requirement for bone tissue engineering applications for the treatment of various kinds of bone defects. Chitosan (CH) has attracted particular attention for drug delivery and bone tissue engineering because of its favorable biocompatibility and biodegradability. In this study, a composite microsphere system containing CH and nanohydroxyapatite (nHA)-alendronate (AL) particles was fabricated by employing both emulsification and cross-linking strategies. The microspheres were characterized for their surface morphology, composition, size distribution, drug loading efficiency and release properties. The results showed that loading efficiency and sustained release of hydrophilic AL were significantly improved, which is ideal for locally sustained release in the bone microenvironment. In vitro osteogenic studies showed that the microspheres could enhance the osteogenic activity of rabbit adipose-derived stem cells. In conclusion, the CH/nHA-AL composite microspheres exhibit promising properties as a candidate for local treatment for bone defects.