Photopolymerizing hydrogel systems provide a method to encapsulate cells and implant materials in a minimally invasive manner. Controlled release of growth factors in the hydrogels may enhance the ability to engineer tissues. IGF-I and TGF-beta1 were loaded in PLGA microspheres using a double emulsion technique. 125 ng and 200 pg of active IGF-I and TGF-beta, respectively, as measured by ELISA, were released over 15 days. The growth factor containing microspheres were photoencapsulated with bovine articular chondrocytes in PEO-based hydrogels and incubated in vitro for two weeks. Statistically significant changes in glycosaminoglycan (GAG) production compared to control gels either without microspheres or with blank spheres were observed after a 14 day incubation with IGF-I and IGF-I/TGF-beta microspheres combined, with a maximum density of 8.41+/-2.5% wet weight GAG. Total collagen density was low and decreased with the IGF-I/TGF-beta microspheres after two weeks incubation, but otherwise remained unchanged in all other experimental groups. Cell content increased 10-fold to 0.18+/-0.056 x 10(6) cells/mg wet weight and extracellular matrix (ECM) staining by H&E increased in hydrogels with IGF-I/TGF-beta microspheres. In conclusion, photoencapsulation of microspheres in PEO-based hydrogels provides a method to deliver molecules such as growth factors in porous hydrogel systems.