A phosphate-containing and photocrosslinkable polymer, poly(ethylene glycol) di-[ethyl phosphatidyl (ethylene glycol) methacrylate], "PhosPEG-dMA", was synthesized. As a water-soluble macromer, PhosPEG-dMA is suitable for in situ injection and cell-encapsulation by light-induced gelation to produce a novel biocompatible and biodegradable hydrogel for application to cartilage and bone tissue engineering. 1H-NMR, MALDI-TOF mass spectrometry, and elemental analysis were performed to characterize the macromer. Fifteen and 20% (w/v) PhosPEG gels were photopolymerized using UV light with 0.05% photoinitiator. The swelling and water content of the hydrogels was studied and the crosslinking efficiency (density) of the macromers was simulated based on the Peppas-Merrill model. Torsional mechanical analysis of the gels demonstrated a viscoelastic characteristic with high elasticity. The results indicated that, with the fixed PEG-segment size, the greater strength and water-content of the gels depend on the higher crosslinking density. Degradation experiments revealed a linear dry-weight loss of 22.88% and 16.08% from 15% and 20% PhosPEG gels after 9 weeks. The 31P-NMR detected the signals of both phosphate and phosphoric acid in the degrading systems (the gel bulks and the supernatants). Finally, human mesenchymal stem cells (hMSC) were encapsulated into PhosPEG Gel constructs and remained viable as qualitatively demonstrated by "Live/Dead" cell staining assay and MTT assay. The cell-encapsulation efficiency was determined by the characterization of DNA content in each gel construct and the semi-quantitative analysis of the cell viability was also performed by the DNA assay combined with MTT assay.