In bone tissue engineering, porous hydroxyapatite (HAp) is used as filling material for bone defects, augmentation, artificial bone graft and scaffold material. The present paper compares the preparation and characterization of HAp from fish scale (FS) and synthetic body fluid (SBF) solution. Thermo gravimetric analysis, differential thermal analysis, Fourier transform infrared spectroscopy, X-ray diffraction (XRD), scanning electron microscopy (SEM) and particle size analysis of the samples have been performed. The analysis indicates that synthesized HAp consists of sub-micron HAp particle with Ca/P ratio corresponding to FS and SBF 1.62 and 1.71, respectively. MTT assay and quantitative DNA analysis show growth and proliferation of cells over the HA scaffold with the increase in time. The shape and size (morphology) of mesenchymal stem cells after 3 days show a transition from rounded shape to elongated and flattened shape expressing its spreading behavior. These results confirm that HAp bio-materials from fish scale are physico-chemically and biologically equivalent to the chemically synthesized HAp from SBF. Biological HAp, thus, possesses a great potential for conversion of industrial by-product into highly valuable compounds using simple effective and novel processes.