Articular cartilage has limited potential for repair. Current clinical treatments for articular cartilage damage often result in fibrocartilage and are associated with joint pain and stiffness. To address these concerns, researchers have turned to the engineering of cartilage grafts. Tissue engineering, an emerging field for the functional restoration of articular cartilage and other tissues, is based on the utilization of morphogens, scaffolds, and responding progenitor/stem cells. Because articular cartilage is a water-laden tissue and contains within its matrix hydrophilic proteoglycans, an engineered cartilage graft may be based on synthetic hydrogels to mimic these properties. To this end, we have developed a polymer system based on the hydrophilic copolymer poly(propylene fumarate-co-ethylene glycol) [P(PF-co-EG)]. Solutions of this polymer are liquid below 25 degrees C and gel above 35 degrees C, allowing an aqueous solution containing cells at room temperature to form a hydrogel with encapsulated cells at physiological body temperature. The objective of this work was to determine the effects of the hydrogel components on the phenotype of encapsulated chondrocytes. Bovine articular chondrocytes were used as an experimental model. Results demonstrated that the components required for hydrogel fabrication did not significantly reduce the proteoglycan synthesis of chondrocytes, a phenotypic marker of chondrocyte function. In addition, chondrocyte viability, proteoglycan synthesis, and type II collagen synthesis within P(PF-co-EG) hydrogels were investigated. The addition of bone morphogenetic protein-7 increased chondrocyte proliferation with the P(PF-co-EG) hydrogels, but did not increase proteoglycan synthesis by the chondrocytes. These results indicate that the temperature-responsive P(PF-co-EG) hydrogels are suitable for chondrocyte delivery for articular cartilage repair.