The aim of this work was fabrication and characterization of bioactive glass-forsterite composites. The effects of the additive on bioactivity, biocompatibility, antibacterial properties, sinterability and mechanical properties of the samples were investigated. Nanocomposite powder samples with different amounts of forsterite were synthesized via sol-gel technique. XRD, TEM, SEM, EDS and FTIR characterization techniques were used. Evaluation of the bioactivity of the samples was done in SBF. Antibacterial activity and cytotoxicity of the samples were also evaluated. A two step sintering (TSS) process was used to produce bulk samples from composite nanopowders. Optimization of different parameters of the TSS process was done by use of the Taguchi method. Nanoindentation and biocompatibility assay tests were done in order to evaluate mechanical properties of the bulk samples. Results yielded 600 ?C as the proper temperature for calcination of the composite powder having an amorphous bioglass matrix. The crystallite size of the forsterite in the prepared powders was lower than 100 nm and was in agreement with results obtained by TEM. The prepared nanopowders didn’t show any cytotoxicity effect on human osteoblast cells and their antibacterial effect on E. coli and S. aureus was observed. XRD and SEM results showed the crystallization of bioglass due to heat treatment at high temperatures. The prepared bulk samples had a grain size less than 200 nm. The optimum densification was reported for the sample with 10% forsterite. Moreover, a hardness and fracture toughness increase was observed in this sample. Cell adhesion test results showed significant osteoblast cell adhesion, spread and growth on the surface of the nanostructured bioglass-forsterite composite ceramic. In conclusion, the prepared bioactive glass-forsterie composite nanopowders and their nanocrystalline bulk can potentially be considered as good candidates for dentistry applications. Keywords : Bioactive glass, Forsterite, Sol- gel, Two step sintering, Nanocomposite