The growth plate is a complex cartilage structure in long bones that mediates growth in children. When injured, the formation of a "bony bar" can occur which impedes normal growth and can cause angular deformities or growth arrest. Current treatments for growth plate injuries are limited and result in poor patient outcomes, necessitating research toward novel treatments that can prevent bony bar formation and stimulate cartilage regeneration. This study investigates alginate-chitosan polyelectrolyte complex (PEC) hydrogels as an injectable biomaterial system to prevent bony bar formation. Biomaterial properties including stiffness and degradation are quantified, and the effect that material properties have on mesenchymal stem cell (MSC) fate is quantified in vitro. Specifically, this study aims to elucidate the effectiveness of biomaterial-based control over the differentiation behavior of MSCs toward osteogenic or chondrogenic lineages using biochemical metabolite assays and quantitative real time PCR. Further, the PEC hydrogels are employed in a rat growth plate injury model to determine their effectiveness in preventing bony bar formation in vivo. Results indicate that hydrogel composition and material properties affect the differentiation tendency of MSCs in vitro, and the PEC hydrogels show promise as an injectable biomaterial for growth plate injuries.