Bioresponsive and intelligent biomaterials are a vehicle for manipulating cell function to promote tissue development and/or tissue engineering. A photopolymerized hydrogel based on a phosphoester-poly(ethylene glycol) polymer (PhosPEG) was synthesized for application to marrow-derived mesenchymal stem cell (MSC) encapsulation and tissue engineering of bone. The phosphor-containing hydrogels were hydrolytically degradable and the rate of degradation increased in the presence of a bone-derived enzyme, alkaline phosphatase. Gene expression and protein analysis of encapsulated MSCs demonstrated that PhosPEG-PEG cogels containing an intermediate concentration of phosphorus promoted the gene expression of bone-specific markers including type I collagen, alkaline phosphatase, and osteonectin, without the addition of growth factors or other biological agents, compared with pure poly(ethylene glycol)-based gels. Secretion of alkaline phosphatase, osteocalcin, and osteonectin protein was also increased in the PhosPEG cogels. Mineralization of gels increased in the presence of phosphorus in both cellular and acellular constructs compared with PEG gels. In summary, phosphate-PEG-derived hydrogels increase gene expression of bone-specific markers, secretion of bone-related matrix, and mineralization and may have a potential impact on bone-engineering therapies.