Background: Successful endodontic therapy is mainly governed by the satisfactory sealing ability of the applied root canal sealer. Also, tolerability of root canal structure to accommodate the presence of a sealer participates in the efficiency of the treatment. Hence, this study was aimed to extrapolate our previous one that was concerned with the preparation and evaluation of novel nature-based root canal sealers. Our current work is focused on the evaluation of sealing ability and in vivo biocompatibility. Materials and Methods: Egyptian propolis was extracted (ProE) and encapsulated in polymeric nanoparticles (ProE-loaded NPs). Two root sealers, PE sealer and PE nanosealer, were fabricated by incorporating ProE and ProE-loaded NPs, respectively. The sealing ability of the developed sealers was tested by a dye extraction method. An in vivo biocompatibility study was conducted using a subcutaneous implantation method for two and four weeks. At the same time, a model sealer (AH Plus®) was subjected to the same procedures to enable accurate and equitable results. Results: The teeth treated with PE sealer exhibited weak sealing ability which did not differ from that of unfilled teeth. PE nanosealer enhanced the sealing ability similarly to the model sealer with minimal apical microleakage. Studying in vivo biocompatibility indicated the capability of the three tested sealers to induce cell proliferation and tissue healing. However, PE nanosealer had superior biocompatibility, with higher potential for cell regeneration and tissue proliferation. Conclusion: PE nanosealer can be presented as an innovative root canal sealer, with enhanced sealing ability as well as in vivo biocompatibility. It can be applied as a substitute for the currently available sealers that demonstrate hazardous effects.