Objective: Synthesize a polymer carrier to present local signals to human mesenchymal stem cells (hMSCs) that induce osteogeneis, maintain cell function, and promote mineralized tissue formation. While a significant amount of research has focused on the differentiation of hMSCs in monolayer culture, very little is known about their differentiation potential when cultured in a three-dimensional environment. Methods: Hydrogels were synthesized by the photoinitiated polymerization of dimethacrylated macromolecular monomers, based on poly(ethylene glycol) (PEG). hMSCs were photoencapsulated in the PEG gels and cultured in vitro for up to 4 weeks. hMSC survival (LIVE/DEAD Assay), osteogenic differentiation (RT-PCR), and mineralized tissue formation (histology) were examined as a function of the gel chemistry. Results: Osteopontin sequestering PEG gels were synthesized that contained phosphate pendant group, and results demonstrated greater than 97% viability after 4 weeks of in vitro culture. As proof of principle, osteogenic promoting hydrogels were synthesized that locally present dexamethasone through a degradable lactide linker to control the kinetics of release from 10 to 20 days. The released dexamethasone was biologically active and influenced the expression of osteogenic genes (e.g., alkaline phosphatase and cbfa1) in a degradation-dependent manner. Interestingly, hMSCs were found to locally degrade the PEG gels in a cellularly controlled manner, which influenced the extent and quality of mineralized tissue formation. Conclusions: PEG gel carriers provide a diverse platform to introduce osteogenic functionalities that promote hMSC survival, differentiation, and ultimately, tissue evolution. Supported by NIH grant DE016523.