Electrospun structures were proposed as scaffolds owing to their morphological and structural simi- larities with the extracellular matrix found in many native tissues. These fibrous structures were also proposed as drug release systems by exploiting the direct dependence of the release rate of a drug on the surface area. An osteogenic differentiation factor, dexamethasone (DEX), was incorporated into elec- trospun polycaprolactone (PCL) nanofibers at different concentrations (5, 10, 15 and 20 wt.% polymer), in a single-step process. The DEX incorporated into the polymeric carrier is in amorphous state, as deter- mined by DSC, and does not influence the typical nanofibers morphology. In vitro drug release studies demonstrated that the dexamethasone release was sustained over a period of 15 days. The bioactivity of the released dexamethasone was assessed by cultivating human bone marrow mesenchymal stem cells (hBMSCs) on 15 wt.% DEX-loaded PCL NFMs, under dexamethasone-absent osteogenic differentiation medium formulation. An increased concentration of alkaline phosphatase and deposition of a mineral- ized matrix was observed. Phenotypic and genotypic expression of osteoblastic-specific markers corroborates the osteogenic activity of the loaded growth/differentiation factor. Overall data suggests that the electrospun biodegradable nanofibers can be used as carriers for the sustained release of growth/differentiation factors relevant for bone tissue engineering strategies.