Clinical trials utilizing mesenchymal stem cells (MSCs) for severe vascular diseases have highlighted the need to effectively engraft cells and promote pro-angiogenic activity. A functional material accomplishing these two goals is an ideal solution as spatiotemporal and batch-to-batch variability in classical therapeutic delivery can be minimized, and tissue regeneration would begin rapidly at the implantation site. Gelatin may serve as a promising biomaterial due to its excellent biocompatibility, biodegradability, and non-immuno/antigenicity. However, the dissolution of gelatin at body temperature and quick enzymatic degradation <i>in viv</i>o have limited its use thus far. To overcome these challenges, an injectable, <i>in situ</i> crosslinkable gelatin was developed by conjugating enzymatically-crosslinkable hydroxyphenyl propionic acid (GHPA). When MSCs are cultured in 3D <i>in vitro</i> or injected <i>in vivo</i> in GHPA, spontaneous endothelial differentiation occurs, as evidenced by marked increases in endothlelial cell marker expressions (<i>Flk1, Tie2, ANGPT1, vWF</i>) in addition to forming an extensive perfusable vascular network after 2-week subcutaneous implantation. Additionally, favorable host macrophage response is achieved with GHPA as shown by decreased iNOS and increased MRC1 expression. These results indicate GHPA as a promising soluble factor-free cell delivery template which induces endothelial differentiation of MSCs with robust neovasculature formation and favorable host response.