The biological aim of root canal treatment is to facilitate periapical tissue healing following endodontic therapy. This study aimed to develop an organotypic infected root canal model to understand the interaction of bacterial biofilm with macrophages and study the therapeutic effect of engineered bioactive chitosan nanoparticles (CSnp) on macrophages. Ex-vivo experiments were conducted in two phases; Phase-1: Enterococcus faecalis biofilms (two and six weeks old) developed in organotypic root canal model were used to characterize residual biofilm after conventional chemical treatment alone and combined with CSnp utilizing Confocal Laser Scanning Microscopy, Scanning Electron Microscopy and colony-forming units from pulverized dentin. Phase-2: The interaction of post-treatment biofilm and RAW macrophages was evaluated regarding pro/anti-inflammatory markers, cell viability and spreading at 24, 48 and 72 h. Compared to conventionally disinfected six-week-old biofilm, CSnp resulted in less viable bacteria (p < 0.01). Scanning electron micrographs demonstrated disruption of the biofilm. CSnp exhibited less residual bacterial load in pulverized dentin (p < 0.001). Macrophage interaction with CSnp-treated biofilm reduced proinflammatory markers (nitric oxide, TNF-α, IL-1β, and IL-6), increased anti-inflammatory marker (TGF-β1) and enhanced cell survival and spreading over time (p < 0.01 at 72 h). Engineered chitosan nanoparticles concurrently inactivated biofilm and altered the inflammatory response of macrophages that would promote healing.