Heparin and heparan sulfate (HS) are attractive components for constructing biomaterials due to their ability to recruit and regulate the activity of growth factors. The structural and functional heterogeneity of naturally derived heparin and HS is, however, an impediment for the preparation of biomaterials for regenerative medicine. To address this problem, we have prepared hydrogels modified by well-defined synthetic HS-derived disaccharides. Human induced pluripotent cell-derived neural stem cells (HIP-NSCs) encapsulated in a polyethylene glycol-based hydrogel modified by a pendent HS disaccharide that is a known ligand for fibroblast growth factor-2 (FGF-2) exhibited a significant increase in proliferation and self-renewal. This observation is important because evidence is emerging that undifferentiated stems cells can yield significant therapeutic benefits via their paracrine signaling mechanisms. Our data indicate that the HS disaccharide protects FGF-2, which has a very short biological half-live, from degradation. It is anticipated that, by careful selection of a synthetic HS oligosaccharide, it will be possible to control retention and release of specific growth factor, which in turn will provide control over cell fate.