For cancer treatment, anti-cancer hydrophobic drugs such as paclitaxel (PTX) are usually intravenously administrated as a systemic delivery which has low targeting efficiency, rapid clearance, and non-specific side effects. Although local chemotherapy using biomaterials to overcome these limitations has attracted attention, the poor water solubility of hydrophobic drugs is still challenging for controlled delivery and bioavailability of drugs. In this study, an in situ forming hydrogel crosslinked with PTX-loaded micelle was developed for enhanced stability and controlled delivery of PTX. Tetronic-tyramine micelle (TTAm) is a phenol-conjugated Tetronic micelle (TETm) that can facilitate enzymatic crosslinking between TTAm and gelatin- hydroxyphenyl propionic acid (GH) hydrogels to produce GH hydrogels crosslinked with TTAm (TTAm/GH) for controllable physicochemical properties such as gelation time, stiffness, and swelling ratio. The TTAm/GH showed PTX release pattern for 4 weeks in a controlled manner, whereas TETm/GH and GH only had limited release profiles. Moreover, TTAm/GH showed cytocompatibility and improved drug efficacy against cancer cells compared to the control group. Such in situ forming GH hydrogel crosslinked with Tetronic micelle is expected to be a promising local hydrophobic anti-cancer drug carrier for cancer treatment.