Cartilage tissue engineering strategies that use in situ forming degradable hydrogels for mesenchymal stem cell (MSC) delivery are promising for treating chondral defects. Hydrogels that recapitulate aspects of the native tissue have the potential to encourage chondrogenesis, permit cellular mediated degradation, and facilitate tissue growth. This study investigated photoclickable poly(ethylene glycol) hydrogels, which were tailored to mimic the cartilage microenvironment by incorporating extracellular matrix analogs, chondroitin sulfate and RGD, and crosslinks sensitive to matrix metalloproteinase 7 (MMP7). Human MSCs were encapsulated in the hydrogel, cultured up to nine weeks, and assessed by mRNA expression, protein production and biochemical analysis. Chondrogenic genes, SOX9, ACAN, and COL2A1, significantly increased with culture time, and the ratios of COL2A1:COL10A1 and SOX9:RUNX2 reached values of ∼20-100 by week 6. The encapsulated MSCs degraded the hydrogel, which was nearly undetectable by week 9. There was substantial deposition of aggrecan and collagen II, which correlated with degradation of the hydrogel. Minimal collagen X was detectable, but collagen I was prevalent. After week1, extracellular matrix elaboration was accompanied by a ∼twofold increase in compressive modulus with culture time. The MMP7-sensitive cartilage mimetic hydrogel supported MSC chondrogenesis and promoted macroscopic neocartilaginous matrix elaboration representative of fibrocartilage. © 2018 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 106A: 2344-2355, 2018.