Exosomes are 30-200 nm sized extracellular vesicles that are increasingly recognized as potential drug delivery vehicles. However, exogenous exosomes are rapidly cleared from the blood upon intravenous delivery, which limits their therapeutic potential. Here, we report bioactive exosome-tethered poly(ethylene oxide)-based hydrogels for the localized delivery of therapeutic exosomes. Using cholesterol-modified DNA tethers, the lipid membrane of exosomes was functionalized with initiators to graft polymers in the presence of additional initiators and crosslinker using photoinduced atom transfer radical polymerization (ATRP). This strategy of tethering exosomes within the hydrogel network allowed their controlled release over a period of 1 month, which was much longer than physically entrapped exosomes. Exosome release profile was tuned by varying the crosslinking density of the polymer network and the use of photocleavable tethers allowed stimuli-responsive release of exosomes. The therapeutic potential of the hydrogels was assessed by evaluating the osteogenic potential of bone morphogenetic protein 2-loaded exosomes on C2C12 and MC3T3-E1 cells. Thus, ATRP-based exosome-tethered hydrogels represent a tunable platform with improved efficacy and an extended-release profile.