Free flap surgery is currently the only successful method used by surgeons to reconstruct critical-sized defects of the jaw, and is commonly used in patients who have had bony lesions excised due to oral cancer, trauma, infection or necrosis. However, donor site morbidity remains a significant flaw of this strategy. Various biomaterials have been under investigation in search of a suitable alternative for segmental mandibular defect reconstruction. Hydrogels are group of biomaterials that have shown their potential in various tissue engineering applications, including bone regeneration, both through in vitro and in vivo pre-clinical animal trials. This review discusses different types of hydrogels, their fabrication techniques, 3D printing, their potential for bone regeneration, outcomes, and the limitations of various hydrogels in preclinical models for bone tissue engineering. This review also proposes a modified technique utilizing the potential of hydrogels combined with scaffolds and cells for efficient reconstruction of mandibular segmental defects.