A novel oligo(poly(ethylene glycol) fumarate) (OPF) was synthesized and used to prepare a biodegradable and biomimetic crosslinked network covalently modified with bioactive peptides for guided bone regeneration. First, we examined the cytotoxicity of each component of the OPF hydrogel formulation and the resulting crosslinked network. Marrow stromal cells (MSCs) exhibited different viability with respect to OPF synthesized with poly(ethylene glycol) (PEG) of various molecular weights, crosslinking agent (PEG-diacylate (PEG-DA)), and the redox initiator pairs. Once crosslinked, the leachable products from the OPF hydrogels had minimal adverse effects on the viability of MSCs. Next study investigated the effects of the concentration of incorporated model peptide, Arg-Gly-Asp (RGD) and macromolecular structures of hydrogels on attachment of MSCs. The network structure was varied by changing number average molecular weight of PEG in OPF from 930 to 6090. The cell attachment on the peptide-modified hydrogel was increased with increasing the peptide concentration. In addition, higher molecular weight PEG compared to peptide spacer length reduced cell attachment. In vivo bone and soft tissue behavior of the OPF hydrogels were also assessed using a rabbit model. The results indicated that the OPF hydrogels are biocompatible as evidenced by an uniform thin circumferential fibrous capsule formation following cranial as well as subcutaneous implantation. In addition, histological analysis suggested that the in vivo degradation can be controlled by tailoring the macromolecular structure of the OPF hydrogels. Finally, osteopontin-derived peptide (ODP) was covalently incorporated to the OPF hydrogels and modulation of MSCs on the peptide-modified hydrogels was investigated. The results showed that OPF-based peptide-modified hydrogels can modulate cell proliferation and migration by altering the specific ligand and its concentration in the hydrogels. Furthermore, peptide-modified hydrogels promoted differentiation and mineralization of osteoblasts as characterized by measuring alkaline phosphatase activity, osteopontin expression, and calcium deposition for in vitro culture. This work demonstrated that the OPF hydrogel modified with bioactive molecules is a promising material for a biodegradable and biomimetic substrate in tissue engineering.