Previously, the polymer poly(ethylene glycol) (PEG) has been used in many biomaterials applications, from surface coatings to the encapsulation of proteins. In this work, we demonstrate that, unexpectedly, low molecular weight PEG has a deleterious effect on the release of the encapsulated protein platelet-derived growth factor AA (PDGF-AA). We also demonstrate release of bioactive PDGF-AA (in the absence of PEG). Specifically, we demonstrate the differentiation of neural stem and progenitor cells to oligodendrocytes, similar to what is observed with the addition of fresh PDGFAA. A differentiated oligodendrocyte population is a key strategy in central nervous system regeneration. This work is the first demonstration of controlled PDGF-AA release, and also brings new insights to the broader field of protein encapsulation.