Calcium hydroxide cement used in dentistry has advantages of proper alkaline pH, releasing calcium ions and promoting tissue regeneration. However, it also has some drawbacks such as high solubility and low strength. In this study, the properties of nano-hydroxyapatite (nHA) added calcium hydroxide cement was investigated for overcoming these drawbacks. Stoichiometric nHA powder was synthesized using orthophosphoric acid and calcium hydroxide. 5, 10 and 15 percent (in w/w) of synthesized nHA powder was added to commercial calcium hydroxide cement and the obtained nanocomposite was characterized by setting time, compressive strength, pH, Ca dissolution, antibacterial tests and SEM. Nanometric size and purity of synthesized apatite was confirmed by XRD and TEM. Setting time increased by increasing the content of nHA. SEM micrographs showed less microporosity for sample with 5% nHA. Adding 5% nHA to calcium hydroxide cement increased compressive strength to 60%, while further additions had an adverse effect. Adding nHA slightly decreased pH and increased Ca dissolution. The antibacterial test revealed that inhibition zone was about 2-2.5 mm for calcium hydroxide cement and sample with 5% nHA and less than 1 mm for other samples. Finally, nanocomposite with 5% nHA exhibited adequate properties to overcome the drawbacks of calcium hydroxide cements.