Polymer-peptide hydrogels are being designed as implantable materials that deliver human mesenchymal stem cells (hMSCs) to treat wounds. Most wounds can progress through the healing process without intervention. During the normal healing process, cytokines are released from the wound to create a concentration gradient, which causes directed cell migration from the native niche to the wound site. Our work takes inspiration from this process and uniformly tethers cytokines into the scaffold to measure changes in cell-mediated degradation and motility. This is the first step in designing cytokine concentration gradients into the material to direct cell migration. We measure changes in rheological properties, encapsulated cell-mediated pericellular degradation and migration in a hydrogel scaffold with covalently tethered cytokines, either tumor necrosis factor-α (TNF-α) or transforming growth factor-β (TGF-β). TNF-α is expressed in early stages of wound healing causing an inflammatory response. TGF-β is released in later stages of wound healing causing an anti-inflammatory response in the surrounding tissue. Both cytokines cause directed cell migration. We measure no statistically significant difference in modulus or the critical relaxation exponent when tethering either cytokine in the polymeric network without encapsulated hMSCs. This indicates that the scaffold structure and rheology is unchanged by the addition of tethered cytokines. Increases in hMSC motility, morphology and cell-mediated degradation are measured using a combination of multiple particle tracking microrheology (MPT) and live-cell imaging in hydrogels with tethered cytokines. We measure that tethering TNF-α into the hydrogel increases cellular remodeling on earlier days postencapsulation and tethering TGF-β into the scaffold increases cellular remodeling on later days. We measure tethering either TGF-β or TNF-α enhances cell stretching and, subsequently, migration. This work provides rheological characterization that can be used to design new materials that present chemical cues in the pericellular region to direct cell migration.