Using cyclodextrin and chitosan that are bio-based compounds, a novel bi-functional catalytic composite is designed, in which metal-organic framework encapsulated phosphomolybdic acid was incorporated in a dual chitosan-cyclodextrin nanosponge bead. The composite was characterized via XRD, TGA, ICP, BET, NH-TPD, FTIR, FE-SEM/EDS, elemental mapping analysis and its catalytic activity was examined in alcohol oxidation and cascade alcohol oxidation-Knoevenagel condensation reaction. It was found that the designed catalyst that possess both acidic feature and redox potential could promote both reactions in aqueous media at 55 °C and various substrates with different electronic features could tolerate the aforementioned reactions to furnish the products in 75-95% yield. Furthermore, the catalyst could be readily recovered and recycled for five runs with slight loss of the catalytic activity. Notably, in this composite the synergism between the components led to high catalytic activity, which was superior to each component. In fact, the amino groups on the chitosan served as catalysts, while cyclodextrin nanosponge mainly acted as a phase transfer agent. Moreover, measurement of phosphomolybdic acid leaching showed that its incorporation in metal-organic framework and bead structure could suppress its leaching, which is considered a drawback for this compound. Other merits of this bi-functional catalyst were its simplicity, use of bio-based compounds and true catalysis, which was proved via hot filtration.