Bone defect that resulted from trauma, tumors, and other reasons is believed as a common clinical problem, which exists mainly in post-traumatic healing. Additionally, autologous/allogeneic transplantation, bone tissue engineering attracts increasing attention due to the existing problem of the limited donor. The applications of biomaterials can be considered as a rising and promising strategy for bone regeneration. Especially, hydrogel is featured with hydrophilic characteristic, good biocompatibility, and porous structure, which shows unique properties for bone regeneration. The main properties of hydrogel such as surface property, adhesive property, mechanical property, porosity, and degradation property, generally present influences on the migration, proliferation, and differentiation of mesenchymal stem cells exclusively or in combination, which consequently affect the regeneration of bones. This review mainly focuses on the theme: "how properties of hydrogel shape bone regeneration." Moreover, the latest progress achieved in the above mentioned direction is further discussed. Despite the fascinating advances researchers have made, certain potential challenges continue to exist in the research field, which need to be addressed for accelerating the clinical translation of hydrogel in bone regeneration.