Benefiting from their inherent localized and controlled release properties, hydrogels are ideal delivery systems for therapeutic drugs or nanoparticles. In particular, applications of hydrogels for the delivery and release of photoresponsive drugs or nanoparticles are receiving increasing attention. However, the effect of the hydrogel matrix on the fluorescence emission and singlet oxygen generation efficiency of the embedded photosensitizers (PSs) has not been clarified. Herein, meso-tetrakis(1-methylpyridinium-4-yl)porphyrin (TMPyP) as a water-soluble PS was encapsulated into an injectable hydrogel formed by glycol chitosan and dibenzaldehyde-terminated telechelic poly(ethylene glycol). Compared to free TMPyP solution, the TMPyP encapsulated in the hydrogel exhibits three distinct advantages: (1) more singlet oxygen was generated under the same laser irradiation condition; (2) much longer tumor retention was observed due to the low fluidity of the hydrogel; and (3) the fluorescence intensity of TMPyP was significantly enhanced in the hydrogel due to its decreased self-quenching effect. These excellent characteristics lead to remarkable anticancer efficacy and superior fluorescence emission property of the TMPyP-hydrogel system, promoting the development of imaging-guided photodynamic therapy.