Our previous reports of interpenetrating networks (IPNs) have demonstrated drastic improvements in mechanical performance relative to individual constituent networks while maintaining viability of encapsulated cells. The current study investigated whether covalent linkage of RGD to the poly(ethylene glycol) diacrylate (PEGDA) network could improve upon cell viability and performance of agarose-PEGDA IPNs compared to unmodified IPNs (control) and to IPNs with different concentrations of physically entrapped aggrecan, providing a point of comparison to previous work. The inclusion of RGD or aggrecan generally did not adversely affect mechanical performance, and significantly improved chondrocyte viability and performance. Although both 4 and 100 μ g/mL of aggrecan improved cell viability, only 100 μ g/mL aggrecan was clearly beneficial to improving biosynthesis, whereas 100 μg/mL of RGD was beneficial to both chondrocyte viability and biosynthesis. Interestingly, clustering of cells within the IPNs with RGD and the higher aggrecan concentration were observed, likely indicating cell migration and/or preferred regional proliferation. This clustering resulted in a clearly visible enhancement of matrix production compared to the other IPNs. With this cell migration, we also observed significant cell proliferation and matrix synthesis beyond the periphery of the IPN, which could have important implications in facilitating integration with surrounding cartilage in vivo. With RGD and aggrecan (at its higher concentration) providing substantial and comparable improvements in cell performance, RGD would be the recommended bioactive signal for this particular IPN formulation and cell source given the significant cost savings and potentially more straightforward regulatory pathway in commercialization.