In this study, an injectable and biodegradable poly(ethylene glycol) (PEG)/arginine glycine aspartic (RGD) peptide hybrid hydrogel has been synthesized and used as a biomimetic scaffold for encapsulation of human mesenchymal stem cells (hMSCs). Tetrahydroxyl PEG was functionalized with acrylate, and then reacted with thiol-containing peptide (RGD). Gelation occurred within 30 min with the addition of cells and PEG-dithiol via Michael addition. The hydrogels synthesized with a peptide concentration of 1.0-5.0 mM achieved significantly greater cell viability when compared to the hydrogels without the RGD peptide. However, the effect of RGD on chondrogenesis was found to be dose-dependent. Immunohistology studies demonstrated that hMSCs encapsulated in the hydrogel matrix with 1.0 mm RGD and TGF-beta 3 showed enhanced positive staining for aggrecan and type II collagen as compared to that with 5.0 mM RGD and unmodified PEG hydrogels. RT-PCR results further revealed that the cells in hydro gels with 1 mm RGD expressed significantly higher levels of type II collagen than those in PEG hydogels without RGD peptide. These findings have demonstrated that the PEG-RGD hydrogels can be a promising scaffold to deliver hMSCs for cartilage repair.