Myocardial cell injection and tissue engineering could provide novel treatment options for heart diseases; however both approaches are limited by the loss of the transplanted myogenic cells. We hypothesized that novel hydrogels could promote cardiomyocyte survival and remedy this critical limitation. The hydrogel described here is based on a photocrosslinked form of chitosan, Az-chitosan, which was covalently bound to the QHREDGS peptide to promote cell survival. The QHREDGS amino acid sequence is thought to be the integrin binding site in angiopoietin-1, a growth factor which has cardioprotective properties. Covalent immobilization was performed using 1-ethyl-3-(-3-dimethylaminopropyl)carbodiimide chemistry. Elastic moduli of the Az-chitosan hydrogel were within the lower physiological range for the neonatal rat heart (1.9 AE 0.2 kPa for 10 mg/ml and 3.5 AE 0.6 kPa for 20 mg/ml). After 6 days of cultivation of neonatal rat heart cells encapsulated with the hydrogels, cell viability and elongation was significantly higher in the peptide modified groups compared to the Az-chitosan control. No significant differences were found in the ability of RGDS and QHREDGS hydrogels to support contractile function in vitro. After subcutaneous implantation of cardiomyocyte hydrogel-peptide constructs in Lewis rats for 7 days, both QHREDGS and RGDS similarly recruited endothelial cells. However, Az-chitosan-QHREDGS gel had a higher percentage of smooth muscle actin (SMA)-positive myofibroblasts. The QHREDGS peptide gel promoted cardiomyocyte elongation and assembly of contractile apparatus and reduced cardiomyocyte apoptosis significantly better than the RGDS peptide. The new Az-chitosan-QHREDGS hydrogel may markedly improve cardiac regeneration by cell therapy.