Chitosan (CS), glycerophosphate (GP) based injectable hydrogels are explored for its implications in bone defect healing and regeneration. Both acellular and cell laden CS based hydrogels are widely investigated and improved through the inclusion of various nanoparticles, polymers and bioactive molecules. In order to improve its applicability for bone tissue repair, we developed an injectable, thermosensitive CS hydrogel containing graphene oxide (GO) and investigated its properties. The hydrogels were investigated for its porous architecture using scanning electron microscopy (SEM), swelling property, protein adsorption ability, degradation rate and exogenous biomineralization. GO addition improved the physico-chemical properties with notable betterment. The CS/GP/GO hydrogel was biocompatible to mesenchymal stem cells and they were metabolically active upon encapsulation. The hydrogel promoted osteogenic differentiation of mouse mesenchymal stem cells by upregualtion of Runt-related transcription factor 2 (Runx2), Alkaline phosphatase (ALP), Type -1 collagen (COL-1), and osteocalcin (OC) under osteogenic conditions. The hydrogel proves to be an amenable platform for carrying cells and exhibited suitable properties to be a potential candidate for bone tissue regeneration.