Cartilage tissue engineering aims to replace damaged or diseased tissue with a functional regenerate that restores joint function. Scaffolds are used to deliver cells and facilitate tissue development, but they can also interfere with the structural assembly of the cartilage matrix. Biodegradable scaffolds have been proposed as a means to improve matrix deposition and the biomechanical properties of neocartilage. The challenge is designing scaffolds with appropriate degradation rates, ideally such that scaffold degradation is proportional to matrix deposition. In this study, we developed a bioresponsive hydrogel with cell-mediated degradation aligned to the chondrogenic differentiation of human mesenchymal stem cells (hMSCs). We identified matrix metalloproteinase 7 (MMP7) as an enzyme with a temporal expression pattern that corresponded with cartilage development. By embedding MMP7 peptide substrates within a poly(ethylene glycol) diacrylate backbone, we built MMP7-sensitive hydrogels with distinct degradation rates. When MMP7-sensitive scaffolds were compared with nondegradable scaffolds in vitro, photoencapsulated hMSCs produced neocartilage constructs with more extensive collagenous matrices, as demonstrated through immunohistochemistry and biochemical quantification of matrix molecules. Furthermore, these changes translated into an increased dynamic compressive modulus. This work presents a practical strategy for designing biomaterials uniquely tuned to individual biological processes.