Thermogelling hydrogels, such as poly(N-isopropylacrylamide) [P(NiPAAm)], provide tunable constructs leveraged in many regenerative biomaterial applications. Recently, our lab developed the crosslinker poly(glycolic acid)-poly(ethylene glycol)-poly(glycolic acid)-di(but-2-yne-1,4-dithiol), which crosslinks P(NiPAAm-co-glycidyl methacrylate) via thiol-epoxy reaction and can be functionalized with azide-terminated peptides via alkyne-azide click chemistry. This study’s aim was to evaluate the impact of peptides on the physicochemical properties of the hydrogels. The physicochemical properties of the hydrogels including the lower critical solution temperature, crosslinking times, swelling, degradation, peptide release and cytocompatibility were evaluated. The gels bearing peptides increased equilibrium swelling indicating hydrophilicity of the hydrogel components. Comparable sol fractions were found for all groups, indicating that inclusion of peptides does not impact crosslinking. Moreover, the inclusion of a matrix metalloproteinase-sensitive peptide allowed elucidation of whether release of peptides from the network was driven by hydrolysis or enzymatic cleavage. The hydrophilicity of the network determined by the swelling behavior was demonstrated to be the most important factor in dictating hydrogel behavior over time. This study demonstrates the importance of characterizing the impact of additives on the physicochemical properties of hydrogels. These characteristics are key in determining design considerations for future in vitro and in vivo studies for tissue regeneration.