A novel thermally sensitive shape memory (SM) hydrogel is prepared by block copolymerization of a cationic surfactant monomer, dimethylhexadecyl[2-(dimethylamino) ethylmethacrylate] ammoniumbromide (C(16)DMAEMA), and acrylamide (AM) in the presence of alpha-cyclodextrin (alpha-CD) using N,N'-methylenebisacrylamide (MBA) as a crosslinker. XRD, solid state C-13 NMR, and DSC measurements show that the crystalline domains, induced by the hydrogen bonds between alpha-CDs threaded on the hydrophobic units of the polymer chains through the host-guest approach, can reversibly melt and crystallize at different temperatures. Rheological measurements show that both the elastic modulus G' and viscous modulus G'' drastically change due to the formation and dissolution of the crystalline domains. These thermo-sensitive crystalline domains serve as reversible physical crosslinks, endowing the hydrogel with excellent SM properties. Cyclic experiments show that the hydrogel can recover to almost 100% of the deformation in each cycle and can be reused several times.