The present study aspires towards fabricating core-sheath fibrous scaffolds by state-of-the-art pressurized gyration for bone tissue engineering applications. The core-sheath fibers comprising dual-phase poly-epsilon-caprolactone (PCL) core and polyvinyl alcohol (PVA) sheath are fabricated using a novel "co-axial" pressurized gyration method. Hydroxyapatite (HA) nanocrystals are embedded in the sheath of the fabricated scaffolds to improve the performance for application as a bone tissue regeneration material. The diameter of the fabricated fiber is 3.97 +/- 1.31 mu m for PCL-PVA/3%HA while pure PCL-PVA with no HA loading gives 3.03 +/- 0.45 mu m. Bead-free fiber morphology is ascertained for all sample groups. The chemistry, water contact angle and swelling behavior measurements of the fabricated core-sheath fibrous scaffolds indicate the suitability of the structures in cellular activities. Saos-2 bone osteosarcoma cells are employed to determine the biocompatibility of the scaffolds, wherein none of the scaffolds possess any cytotoxicity effect, while cell proliferation of 94% is obtained for PCL-PVA/5%HA fibers. The alkaline phosphatase activity results suggest the osteogenic activities on the scaffolds begin earlier than day 7. Overall, adaptations of co-axial pressurized gyration provides the flexibility to embed or encapsulate bioactive substances in core-sheath fiber assemblies and is a promising strategy for bone healing.