Here we report controlled formation of sustained, soluble protein concentration gradients within hydrated polymer networks. The approach involves spatially localizing proteins or biodegradable, protein-loaded microspheres within hydrogels to form a protein-releasing “depot”. Soluble protein concentration gradients are then formed as the released protein diffuses away from the localized source. Control over key gradient parameters, including maximum concentration, gradient magnitude, slope, and time dynamics, is achieved by controlling the release of protein from the depot and subsequent transport through the hydrogel. Results demonstrate a direct relationship between the amount of protein released from the depot and the source concentration, gradient magnitude, and slope of the concentration gradient. In addition, an inverse relationship exists between the diffusion coefficient of protein within the hydrogel and the slope of the concentration gradient. The time dynamics of the concentration gradient profile can be directly correlated to protein release from the localized source, providing a mechanism for temporally controlling gradient characteristics. Therefore, each key, biologically relevant parameter associated with the protein concentration gradient can be controlled by defining protein release and diffusion. We anticipate that the resulting materials may be useful in three-dimensional cell culture systems, and in emerging tissue engineering approaches that aim to regenerate complex, functional tissues.