Three-dimensional hydrogel constructs incorporated with live stem cells that support chondrogenic differentiation and maintenance offer a promising regenerative route towards addressing the limited self-repair capabilities of articular cartilage. In particular, hydrogel scaffolds that augment chondrogenesis and recapitulate the native physical properties of cartilage, such as compressive strength, can potentially be applied in point-of-care procedures. We report here the synthesis of two new materials, [poly-L-lactic acid/polyethylene glycol/poly-L-lactic acid] (PLLA-PEG 1000) and [poly-D,L-lactic acid/polyethylene glycol/poly-D,L-lactic acid] (PDLLA-PEG 1000), that are biodegradable, biocompatible (>80% viability post fabrication), and possess high, physiologically relevant mechanical strength (~1,500 to 1,800 kPa). This study examined the effects of physiologically relevant cell densities (4, 8, 20, and 50 × 106/mL) and hydrogel stiffnesses (~150kPa to ~1,500 kPa Young’s moduli) on chondrogenesis of human bone marrow stem cells incorporated in hydrogel constructs fabricated with these materials and a previously characterized PDLLA-PEG 4000. Results showed that 20 × 106 cells/mL, under a static culture condition, was the most efficient cell seeding density for extracellular matrix (ECM) production on the basis of hydroxyproline and glycosaminoglycan content. Interestingly, material stiffness did not significantly affect chondrogenesis, but rather material concentration was correlated to chondrogenesis with increasing levels at lower concentrations based on ECM production, chondrogenic gene expression, and histological analysis. These findings establish optimal cell densities for chondrogenesis within three-dimensional cell-incorporated hydrogels, inform hydrogel material development for cartilage tissue engineering, and demonstrate the efficacy and potential utility of PDLLA-PEG 1000 for point-of-care treatment of cartilage defects.