SpyCatcher, a 15 kDa protein domain that spontaneously forms a site-specific covalent bond with the 13 amino acid peptide SpyTag, was used to covalently link a model recombinant protein containing a SpyCatcher domain and the adhesive ligand Arg-Gly-Asp-Ser (RGDS) (RGDS-SC) into SpyTag-containing poly(ethylene glycol) (PEG) hydrogels. This new strategy for covalent immobilization of proteins or peptides provides an easy and gentle mechanism for biochemical modification of hydrogels. Labeling efficiency was approximately 100% when soluble RGDS-SC was applied to SpyTag-containing hydrogels at a 1:1 molar ratio. RGDS-SC remained stably bound throughout the 5 days of rinsing, and 3T3 fibroblasts were able to adhere to PEG gels presenting RGDS-SC, but did not adhere when the scrambled amino acid sequence RDGS was presented instead. Fibroblasts encapsulated within 3D cell-degradable PEG hydrogels containing SpyTag did not spread until RGDS-SC was added to the gels, at which point cell spreading was induced. This cell-friendly site-specific ligation strategy could have great utility in driving specific cellular outcomes using biochemically dynamic hydrogels.