Local, controlled induction of angiogenesis remains a challenge that limits tissue engineering approaches to replace or restore diseased tissues. We present a new class of bioactive synthetic hydrogel matrices based on poly(ethylene glycol) (PEG) and synthetic peptides that exploits the activity of vascular endothelial growth factor (VEGF) alongside the base matrix functionality for cellular ingrowth, that is, induction of cell adhesion by pendant RGD-containing peptides and provision of cell-mediated remodeling by cross-linking matrix metalloproteinase substrate peptides. By using a Michael-type addition reaction, we incorporated variants of VEGF121 and VEGF165 covalently within the matrix, available for cells as they invade and locally remodel the material. The functionality of the matrix-conjugated VEGF was preserved and was critical for in vitro endothelial cell survival and migration within the matrix environment. Consistent with a scheme of locally restricted availability of VEGF, grafting of these VEGF-modified hydrogel matrices atop the chick chorioallontoic membrane evoked strong new blood vessel formation precisely at the area of graft-membrane contact. When implanted subcutaneously in rats, these VEGF-containing matrices were completely remodeled into native, vascularized tissue. This type of synthetic, biointeractive matrix with integrated angiogenic growth factor activity, presented and released only upon local cellular demand, could become highly useful in a number of clinical healing applications of local therapeutic angiogenesis.