Hyaluronic acid (HA) is an extracellular matrix molecule with multiple physical and biological functions found in many tissues, including cartilage. HA has been incorporated in a number of biomaterial and scaffold systems. However, HA in the material may be difficult to control if it is not chemically modified and chemical modification of HA may negatively impact biological function. In this study, we developed a poly(ethylene glycol) hydrogel with noncovalent HA-binding capabilities and evaluated its ability to support cartilage formation in vitro and in an articular defect model. Chondrogenic differentiation of mesenchymal stem cells encapsulated in the HA-interactive scaffolds containing various amounts of exogenous HA was evaluated. The HA-binding hydrogel without exogenous HA produced the best cartilage as determined by biochemical content (glysocaminoglycan and collagen), histology (Safranin O and type II collagen staining), and gene expression analysis for aggrecan, type I collagen, type II collagen, and sox-9. This HA-binding formulation was then translated to an osteochondral defect model in the rat knee. After 6 weeks, histological analysis demonstrated improved cartilage tissue production in defects treated with the HA-interactive hydrogel compared to noninteractive control scaffolds and untreated defects. In addition to the tissue repair in the defect space, the Safranin O staining in cartilage tissue surrounding the defect was greater in treatment groups where the HA-binding scaffold was applied. In sum, incorporation of a noncovalent HA-binding functionality into biomaterials provides an ability to interact with local or exogenous HA, which can then impact tissue remodeling and ultimately new tissue production.