An injectable, biodegradable hydrogel composite of oligo(poly(ethylene glycol) fumarate) (OPF) and gelatin microparticles (MPs) has been investigated as a cell and growth factor carrier for cartilage tissue engineering applications. In this study, hydrogel composites with different swelling ratios were prepared by cross-linking OPF macromers with poly(ethylene glycol) (PEG) repeating units of varying molecular weights from 1000 approximately 35000. Rabbit marrow mesenchymal stem cells (MSCs) and MPs loaded with transforming growth factor-beta1 (TGF-beta1) were encapsulated in the hydrogel composites to examine the effect of the swelling ratio of the hydrogel composites on the chondrogenic differentiation of encapsulated rabbit marrow MSCs both in the presence and in the absence of TGF-beta1. The swelling ratio of the hydrogel composites increased as the PEG molecular weight in the OPF macromers increased. Chondrocyte-specific genes were expressed at higher levels in groups containing TGF-beta1-loaded MPs and varied with the swelling ratio of the hydrogel composites. OPF hydrogel composites with PEG repeating units of molecular weight 35000 and 10000 with TGF-beta1-loaded MPs exhibited a 159 +/- 95- and a 89 +/- 31-fold increase in type II collagen gene expression at day 28, respectively, while OPF hydrogel composites with PEG repeating units of molecular weight 3000 and 1000 with TGF-beta1-loaded MPs showed a 27 +/- 10- and a 17 +/- 7-fold increase in type II collagen gene expression, respectively, as compared to the composites with blank MPs at day 0. The results indicate that chondrogenic differentiation of encapsulated rabbit marrow MSCs within OPF hydrogel composites could be affected by their swelling ratio, thus suggesting the potential of OPF composite hydrogels as part of a novel strategy for controlling the differentiation of stem cells.