In this study, we investigated the mineralization capacity and biocompatibility of injectable, dual-gelling hydrogels in a rat cranial defect as a function of hydrogel hydrophobicity from either the copolymerization of a hydrolyzable lactone ring or the hydrogel polymer content. The hydrogel system comprised a poly(N-isopropylacrylamide)-based thermogelling macromer (TGM) and a polyamidoamine crosslinker. The thermogelling macromer was copolymerized with (TGM/DBA) or without (TGM) a dimethyl-γ-butyrolactone acrylate (DBA)-containing lactone ring that modulated the lower critical solution temperature and thus, the hydrogel hydrophobicity, over time. Three hydrogel groups were examined: (1) 15wt.% TGM, (2) 15wt.% TGM/DBA, and (3) 20wt.% TGM/DBA. The hydrogels were implanted within an 8mm critical size rat cranial defect for 4 and 12weeks. Implants were harvested at each timepoint and analyzed for bone formation, hydrogel mineralization and tissue response using microcomputed tomography (microCT). Histology and fibrous capsule scoring showed a light inflammatory response at 4weeks that was mitigated by 12weeks for all groups. MicroCT scoring and bone volume quantification demonstrated a similar bone formation at 4weeks that was significantly increased for the more hydrophobic hydrogel formulations - 15wt.% TGM and 20wt.% TGM/DBA - from 4weeks to 12weeks. A complementary in vitro acellular mineralization study revealed that the hydrogels exhibited calcium binding properties in the presence of serum-containing media, which was modulated by the hydrogel hydrophobicity. The tailored mineralization capacity of these injectable, dual-gelling hydrogels with hydrolysis-dependent hydrophobicity presents an exciting property for their use in bone tissue engineering applications.