Our aim was to synthesize a biomaterial that stimulates angiogenesis for tissue engineering applications by exploiting the ability of heparin to bind and release vascular endothelial growth factor (VEGF). The approach adopted involved modification of a hydrogel with positively charged peptides (oligolysine or oligoarginine) to achieve heparin binding. Precursor hydrogels were produced from copolymerization of N-vinyl pyrolidone, diethylene glycol bis allyl carbonate and acrylic acid (PNDA) and functionalized after activation of the carboxylic acid groups with trilysine or triarginine peptides (PNDKKK and PNDRRR). Both hydrogels were shown to bind and release bioactive VEGF165 with arginine-modified hydrogel outperforming the lysine-modified hydrogel. Cytocompatibility of the hydrogels was confirmed in vitro with primary human dermal fibroblasts and human dermal microvascular endothelial cells (HUDMECs). Proliferation of HUDMECs was stimulated by triarginine-functionalized hydrogels, and to a lesser extent by lysine functionalized hydrogels once loaded with heparin and VEGF. The data suggests that heparin-binding hydrogels provide a promising approach to a pro-angiogenic biomaterial. Biotechnol. Bioeng. 2013; 110: 296–317. © 2012 Wiley Periodicals, Inc.