Immobilization of biosensors in or on a functional material is critical for subsequent device development and translation to wearable technology. Here, we present the development and assessment of an immobilized quantum dot-transcription factor-nucleic acid complex for progesterone detection as a first step toward such device integration. The sensor, composed of a polyhistidine-tagged transcription factor linked to a quantum dot and a fluorophore-modified cognate DNA, is embedded within a hydrogel as an immobilization matrix. The hydrogel is optically transparent, soft, and flexible as well as traps the quantum dot-transcription factor DNA assembly but allows free passage of the analyte, progesterone. Upon progesterone exposure, DNA dissociates from the quantum dot-transcription factor DNA assembly resulting in an attenuated ratiometric fluorescence output via Förster resonance energy transfer. The sensor performs in a dose-dependent manner with a limit of detection of 55 nM. Repeated analyte measurements are similarly successful. Our approach combines a systematically characterized hydrogel as an immobilization matrix and a transcription factor-DNA assembly as a recognition/transduction element, offering a promising framework for future biosensor devices.