The utility of plant tissues as scaffolding materials has been gaining significant interest in recent years owing to their unique material characteristics that are ideal for tissue regeneration. In this study, the degradation and biocompatibility of natural cellulosic scaffolds derived from Borassus flabellifer (Linn.) (BF) immature endosperm was improved by chemical oxidation and surface functionalization processes. Briefly, thus obtained cellulosic scaffolds were sequentially processed via a detergent exchange decellularization process followed by sodium periodate mediated oxidation and organosilane-based surface modification using amino (NH2)-terminated 3-aminopropyltriethoxysilane (APTES) and methyl (CH3)-terminated octadecyltrichlorosilane (OTS). Post oxidation and surface functionalization, the scaffolds showed improved physiochemical, morphological, and mechanical properties. Especially, the swelling capacity, total porosity, surface area, degradation kinetics, and mechanical behavior of scaffold were significantly higher in modified scaffold groups. The biocompatibility analysis demonstrated excellent cellular adhesion, proliferation and differentiation of osteoblasts with an evident upregulation of mineralization. Subcutaneous implantation of these scaffolds in a rat model demonstrated active angiogenesis, enhanced degradation, and excellent biocompatibility with concomitant deposition of a collagen matrix. Taken together, the native cellulosic scaffolds post chemical oxidation and surface functionalization can exclusively integrate the potential properties of native soft tissue with ameliorated in vitro and in vivo support in bone tissue engineering for nonloading bearing applications.