In this work, functional characterization of biomaterials concerning potential application as articular cartilage implants was performed by using a biomimetic bioreactor with dynamic compression in the physiological regime (10% strain, 0.84 Hz frequency, 1 h on/1 h off). Specifically, two alginate types with low (LG) and high (HG) guluronic/mannuronic residue ratios with electrochemically synthesized silver nanoparticles (AgNPs) were evaluated. HG Ag/alginate hydrogels were clearly indicated as potential candidates due to better initial mechanical properties as compared to LG hydrogels (dynamic compression modulus of ~60 vs. ~40 kPa) as well as the mechanical stability displayed during 7 days of dynamic compression. Cytotoxicity studies in 3D bovine cartilage explant cultures under dynamic compression have shown negligible effects as compared to standard 2D monolayers of bovine chondrocytes where moderate cytotoxicity was observed. Finally, experimental and mathematical modeling studies revealed different mechanisms of AgNP release under physiological‐like bioreactor conditions as compared to static conditions. Overall, the results clearly demonstrate bioreactor advantages in characterization and selection of candidate biomaterials as well as potentials to bridge the in vitro‐in vivo gap. © 2018 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 107A: 755–768, 2019.