A potential bone tissue engineering material was produced from a biodegradable polymer, poly(lactic-co-glycolic acid) (PLGA), loaded with nanodiamond phospholipid compound (NDPC) via physical mixing. On the basis of hydrophobic effects and physical absorption, we modified the original hydrophilic surface of the nanodiamond (NDs) with phospholipids to be amphipathic, forming a typical core-shell structure. The ND-phospholipid weight ratio was optimized to generate sample NDPC50 (i.e., ND-phospholipid weight ratio of 100:50), and NDPC50 was able to be dispersed in a PLGA matrix at up to 20 wt %. Compared to a pure PLGA matrix, the introduction of 10 wt % of NDPC (i.e., sample NDPC50-PF10) resulted in a significant improvement in the materials mechanical and surface properties, including a decrease in the water contact angle from 80 to 55 degrees, an approximately 100% increase in the Youngs modulus, and an approximate 550% increase in hardness, thus closely resembling that of human cortical bone. As a novel matrix supporting human osteoblast (hFOB1.19) growth, NDPC50-PFs with different amounts of NDPC50 demonstrated no negative effects on cell proliferation and osteogenic differentiation. Furthermore, we focused on the behaviors of NDPC-PFs implanted into mice for 8 weeks and found that NDPC-PFs induced acceptable immune response and can reduce the rapid biodegradation of PLGA matrix. Our results represent the first in vivo research on ND (or NDPC) as nanofillers in a polymer matrix for bone tissue engineering. The high mechanical properties, good in vitro and in vivo biocompatibility, and increased mineralization capability suggest that biodegradable PLGA composite matrices loaded with NDPC may potentially be useful for a variety of biomedical applications, especially bone tissue engineering.