Osteoarthritis (OA) is a debilitating joint disease resulting from chronic joint inflammation and erosion of articular cartilage. A promising biological treatment for OA is intra‐articular administration of platelet‐rich plasma (PRP). However, immediate bolus release of growth factors limits beneficial therapeutic effects of PRP, thus necessitating the demand for sustained release platforms. In this study, we evaluated the therapeutic value of PRP released from a polyethylene glycol (PEG) hydrogel on articular chondrocytes/cartilage explants derived from OA patients. Lyophilized PRP (PRGF) was encapsulated in PEG hydrogels at 10% w/v and hydrogel swelling, storage modulus and degradation and PRGF release kinetics were determined. PRGF releasate from the hydrogels was collected on day 1, 4, and 11. Encapsulation of PRGF at 10% w/v in PEG hydrogels had minimal effect on hydrogel properties. PRGF was released with an initial burst followed by sustained release until complete hydrogel degradation. Effect of PRGF releasates and bolus PRGF (1% w/v PRGF) on patient‐derived cartilage explants or chondrocytes was assessed by chondrocyte proliferation (pico‐green assay), gene expression for COL1A1, COL2A1, MMP13, COX2, and NFKB1 (real‐time polymerase chain reaction), and measurement of nitric oxide concentration (Griess’ assay). Compared to bolus PRGF, PRGF releasates enhanced chondrocyte proliferation, suppressed the expression of genes like MMP13, NFKB1, COL1A1, and COL2A1 and reduced levels of nitric oxide. Taken together, these results indicate that release of PRGF from PEG hydrogels may improve the therapeutic efficacy of PRP and merits further investigation in an animal model of OA. © 2019 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. J Orthop Res 37:2401–2410, 2019