Transplanted glial-restricted progenitor (GRP) cells have potential to focally replace defunct astrocytes and produce remyelinating oligodendrocytes to avert neuronal death and dysfunction. However, most central nervous system cell therapeutic paradigms are hampered by high initial cell death and a host anti-graft immune response. We show here that composite hyaluronic acid-based hydrogels of tunable mechanical strengths can significantly improve transplanted GRP survival and differentiation. Allogeneic GRPs expressing green fluorescent protein and firefly luciferase were scaffolded in optimized hydrogel formulations and transplanted intracerebrally into immunocompetent BALB/c mice followed by serial in vivo bioluminescent imaging and chemical exchange saturation transfer magnetic resonance imaging (CEST MRI). We demonstrate that gelatin-sensitive CEST MRI can be exploited to monitor hydrogel scaffold degradation in vivo for ∼5 weeks post transplantation without necessitating exogenous labeling. Hydrogel scaffolding of GRPs resulted in a 4.5-fold increase in transplanted cell survival at day 32 post transplantation compared to naked cells. Histological analysis showed significant enhancement of cell proliferation as well as Olig2+ and GFAP+ cell differentiation for scaffolded cells compared to naked cells, with reduced host immunoreactivity. Hence, hydrogel scaffolding of transplanted GRPs in conjunction with serial in vivo imaging of cell survival and hydrogel degradation has potential for further advances in glial cell therapy.