Successful tissue repair and regeneration relies on the design of new biomaterials that can mediate cell interaction without inflicting undesirable responses. Novel physically crosslinked polyurethane-block-poly(vinyl pyrrolidone) hydrogel biomaterials were synthesized by the macroiniferter controlled radical polymerization method. The structures of the hydrogels were studied by FT-IR and (1)H NMR. Hydrogels with EWC up to 37 wt.-% were prepared. The presence of the PVP block significantly increased the hard-segment glass transition temperature. Vascular smooth muscle cell attachment and spreading on the hydrogels indicated that these materials have a potential for use as scaffolds in tissue engineering.