Tissue engineering hope to fill the donor gap between patient needing transplantation and donors able to provide organs. Many challenges exist in the engineering of replacement tissues such as cell sourcing and scaffold design. A particularly promising group of scaffolds used extensively in tissue engineering research are based on cross-linked poly(ethylene glycol) (PEG) hydrogels. Materials based on these gels have been selected for their tissue-like high water content, low cell toxicty, mild polymerization conditions and the ease with which their mechanical and chemical properties can be tuned. However, all materials which will ultimately be implanted into will elicit a host response. This reaction is initiated when a wound is created. It leads to bathing of the material in proteins from the blood, recruitment, attachment and interrogation of the material by macrophages, attempted degradation and phagocytosis, macrophage fusion into foreign body giant cells (FBGCs) and ultimately the “walling off” of the implant as a dense collagenous capsule surrounds the material restricting further interactions with the host. This foreign body response (FBR) is well studied and contributes significantly to premature failure of implanted medical devices. The research presented in this thesis aims to characterize the FBR to PEG-based tissue engineering scaffolds with the intention of uncovering mechanisms by which the response can be attenuated. To this end, implantation studies have been performed to gauge the severity of the foreign body response to these hydrogels and to establish to what degree modifications with the cell adhesion peptide alter this reaction in vivo. Additionally, in vitro models were established to study characteristics of the the early (< 1 week), middle (1-2 weeks) and late phases (> 2 weeks) of the FBR. Studies were performed to determine the potentially detrimental effects of macrophage interrogation of a PEG-based skin tissue engineering system containing encapsulated fibroblasts. Finally, preliminary work has been done on a strategy for manipulating macrophage interactions with tissue engineering hydrogels utilizing a novel hydrogel coating system. This provides some of the first correlations between in vivo host responses and in vitro macrophage responses to PEG-based tissue engineering materials.