Providing affinity sites on alginate (ALG) matrix enables specific binding of growth factors to the polymer backbone and allows their release in a controlled fashion. In this study, we used a blend of alginate sulfate (ALG‐S) and polyvinyl alcohol (PVA) to fabricate electrospun scaffolds capable of delivering a heparin‐like growth factor, transforming growth factor‐beta1 (TGF‐β1). The alginate was sulfated with different degrees of sulfation (DS, from 0.8, 3.4 to 12.4%) by a simple process. The success of sulfation was determined by Fourier‐transform infrared spectroscopy (FTIR), nuclear magnetic resonance spectroscopy (NMR), elemental analysis, ultraviolet (UV) spectroscopy and staining with dimethylmethylene blue. The physical‐mechanical properties of nanofibrous mats were characterized by scanning electron microscopy (SEM), FTIR, energy‐dispersive X‐ray spectroscopy (EDX), tensile strength and mass loss analysis. Additionally, the release kinetics of transforming growth factor‐β1 (TGF‐β1) from PVA/ALG‐S and PVA/ALG scaffolds were compared. The results showed that the binding and entrapment of TGF‐β1 to the nanofibrous scaffolds are improved by the addition of sulfate group to alginate. In conclusion, our results support that nanofibrous scaffold based on PVA/ALG‐S can deliver growth factors in tissue engineering application. © 2018 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 107A: 403–413, 2019.