Encapsulation of polyoxometalates into chitosan have drawn tremendous attraction of researchers in biomedical science. Chitosan (CS) is widely studied for its significant biomedical applications. In this study we have synthesized a nano-composite by encapsulating a cobalt substituted lacunary undecatungstosilicate [CoSiW11O39(H2O)]6-, into biocompatible chitosan. The combination of polyoxometalate with chitosan is not merely physical mixture but indeed it is nano-composite formed by electrostatic interaction between anionic polyoxometalate and cationic chitosan. The resulting nano-complex, (CoSLPOM-CS) was characterized by FT-IR, UV-Vis spectra, energy dispersive X-ray (EDX), scanning electron microscopy (SEM), atomic force microscopy (AFM) and Dynamic light scattering (DLS). FTIR and UV-Vis spectra analysis confirms the successful encapsulation of cobalt substituted lacunary polyoxometalate into chitosan. The antibacterial activity of CoSLPOM, chitosan and CoSLPOM-CS were tested against bacterial strains of B. subtilis gram (+) ve and P. aeruginosa gram (-) ve. The CoSLPOM-CS showed enhanced antibacterial activity as compared to bare CoSLPOM and chitosan. The nano-complex, CoSLPOM-CS was further investigated for drug delivery and it exhibited excellent drug loading efficiency. [ABSTRACT FROM AUTHOR]