Cardiovascular diseases, including myocardial infarction, are the leading cause of death worldwide for both men and women. Current therapies are limited by the restricted intrinsic regeneration capacity of the heart and by the lack of organs for transplantation. Human embryonic stem (hES) cells have the capacity to differentiate into various cell types, including vascular cells for forming de novo blood vessels to potentially repair the infarcted heart after myocardial infarction. Our goal was to improve cardiac function after myocardial infarction through hES-based cardiovascular tissue engineering. Our findings summarized: Improved cardiac performance, attenuated left ventricular dilation and decreased infarct size in infarcted rats can be attained after co-injection of hES-derived vascular cells and Thymosin β4 (Tβ4) in matrix metalloproteinase (MMP)-responsive hydrogels. Enhanced vascular cell adhesion, survival and organization can be achieved when coencapsulating bioactive peptide Tβ4 in MMP-responsive matrix in vitro. Directed cardiac differentiation of pluripotent cells can be influenced by matrix elasticity, adhesion ligand concentration and MMP-sensitivity in vitro. We first systematically modulated a three-dimensional (3D) MMP-responsive hydrogel, mimicking key biochemical characteristics of natural collagenous matrices, the major constituent of cardiac extracellular matrices. We found that these synthetic poly(ethylene glycol) (PEG)-based hydrogels can direct differentiation of pluripotent cardioprogenitors, using P19 embryonal carcinoma (EC) cells as a model, along a cardiac lineage in vitro. In order to systematically probe 3D matrix effects on P19 EC differentiation, matrix elasticity, MMP-sensitivity and the concentration of a matrix-bound RGDSP peptide, which is relevant in early cardiac developments were modulated. Soft matrices (E = 320 ± 64 Pa), mimicking the elasticity of embryonic cardiac tissue, increased the fraction of cells expressing the early cardiac transcription factor Nkx2.5 around 2-fold compared to embryoid bodies (EB) in suspension. In contrast, stiffer matrices (E = 4040 ± 420 Pa) decreased the number of Nkx2.5-positive cells significantly. Further indicators of cardiac maturation were promoted by ligation of integrins relevant in early cardiac development (α5β1, αvβ3) by the RGDSP ligand in combination with the MMP-sensitivity of the matrix, with a 6-fold increased amount of myosin heavy chain (MHC)-positive cells as compared to EB in suspension. This precisely controlled 3D culture system thus may serve as a potential alternative to natural matrices for engineering cardiac tissue structures for cell culture and potentially therapeutic applications. Neovascularization of infarcted tissue is a promising alternative strategy to potentially restoring lost contractile performance by cardiac cells. Vascular cells and cytokines are known to contribute to the protection of cardiomyocytes from death after myocardial infarction, but also in endogenous recruitment of vascular cells and even cardiomyocytes. The in vitro potential of the synthetic MMP-responsive PEG-hydrogel as a bioactive co-encapsulation system for vascular cells and a small bioactive peptide, Tβ4, was then examined. Tβ4 was previously shown to enhance survival of vascular cells and cardiomyocytes in ischemic environments, stimulate neovascularization after cardiac injury by inducing endogenous endothelial cell migration to the ischemic site, as well as play a key role in down-regulating expression of inflammatory molecules. We show that the physical incorporation of Tβ4 in this bioactive matrix creates a 3D environment conducive for human umbilical vein endothelial cell (HUVEC) adhesion, survival, migration and organization. Gels with entrapped Tβ4 increased the survival of HUVEC compared to gels without Tβ4 (p < 0.05), and significantly up-regulated the endothelial genes vascular endothelial-cadherin and angiopoietin-2, whereas the von Willebrand factor was significantly down-regulated (all p < 0.05). Incorporation of Tβ4 significantly increased MMP-2 and MMP-9 secretion of encapsulated HUVEC (p < 0.05). The gel acts as a controlled Tβ4-release system, as MMP-2 and MMP-9 enzymes trigger the release. In addition, Tβ4 facilitated HUVEC attachment and induced vascular-like network formation upon the PEG-hydrogels. These MMP-responsive PEG-hydrogels may thus serve as controlled co-encapsulation system of vascular cells and bioactive factors for in situ regeneration of ischemic tissues. Finally, we employed these injectable MMP-responsive bioactive hydrogels with vasculo-typic adhesion molecule as a provisional in situ reservoir of vascular cells derived from hES cells and Tβ4 peptide, in infarcted hearts. Typically, after myocardial infarction, the performance-generating contractile cardiac tissue is partially replaced by non-contractile fibrotic tissue, driven by upregulated enzymes such as MMP. Here, magnetic resonance imaging (MRI) revealed enhanced contractile performance 3 days and 6 weeks after myocardial infarction (both p < 0.001), attenuated left ventricular dilation (p < 0.05) and decreased infarct size at 6 weeks (p < 0.05) as compared to infarcted rats with PBS injection. . We found the gel substituting the native degrading extracellular matrix in the infarcted myocardium and promoting structural organization of endothelial cells and cardiomyocytes, while the delivered hES-derived vascular cells formed de novo capillaries in the infarct zone.