Carbon nanotubes (CNT) possess excellent mechanical properties to play the role as reinforcement for imparting strength and toughness to brittle hydroxyapatite (HA) bioceramic coating. However, lack of processing technique to uniformly distribute multiwalled CNTs in HA coating and limited studies and sparse knowledge evincing toxicity of CNTs has kept researchers in dispute for long. In the current work, we have addressed these issues by (i) successfully distributing multiwalled CNT reinforcement in HA coating using plasma spraying to improve the fracture toughness (by 56%) and enhance crystallinity (by 27%), and (ii) culturing human osteoblast hFOB 1.19 cells onto CNT reinforced HA coating to elicit its biocompatibility with living cells. Unrestricted growth of human osteoblast hFOB 1.19 cells has been observed near CNT regions claiming assistance by CNT surfaces to promote cell growth and proliferation.