In this study, a collagen mimetic peptide (CMP) containing a GFOGER sequence flanked by GPO repeat units (sequence: (GPO)4GFOGER(GPO)4GCG, CMP) was synthesized and chemically incorporated into a poly(ethylene glycol) (PEG) hydrogel through Michael addition chemistry. The PEG/collagen mimetic peptide hybrid hydrogel was used as a scaffold for encapsulation, proliferation and differentiation of human mesenchymal stem cells (hMSCs) into neocartilage/chondrocytes. Biophysical studies indicated that this peptide adopts stable triple helical conformation under simulated physiological conditions. Tetra hydroxyl PEG was functionalized to generate an acrylate group and reacted with the peptide, and hydrogels were formed in situ with the addition of cells and tetra sulfhydryl PEG via Michael addition. The effect of CMP on proliferation and chondrogenesis of hMSCs was investigated. The results demonstrated that PEG-CMP hydrogels provided a natural environment, which promoted chondrogenesis of hMSCs and enhanced secretion of cartilage specific ECM as compared to PEG hydrogels without the peptide. This was attributed to enhanced cell/matrix interactions via integrin β1/GFOGER interactions. Further, chondrogenesis was found to be affected by matrix elasticity. Soft matrix induced a greater degree of chondrogenic differentiation; however, stiff matrix had an opposite effect, inhibiting chondrogenic differentiation probably due to limited mass transport. This soft PEG/CMP hydrogel shows promise as a biomimetic scaffold that provides a desirable environment for the chondrogenic differentiation of hMSCs and is useful for the repair of cartilage defects. © 2010 Elsevier Ltd.