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Segmental polyurethanes exhibit biphasic morphology and can control cell fate by providing distinct matrix guided signals to increase the chondrogenic potential of mesenchymal stem cells (MSCs). Polyethylene glycol (PEG) based hydrophilic polyurethanes can deliver differential signals to MSCs through their matrix phases where hard segments are cell-interactive domains and PEG based soft segments are minimally interactive with cells. These coordinated communications can modulate cell–matrix interactions to control cell shape and size for chondrogenesis. Biphasic character and hydrophilicity of polyurethanes with gel like architecture provide a synthetic matrix conducive for chondrogenesis of MSCs, as evidenced by deposition of cartilage-associated extracellular matrix. Compared to monophasic hydrogels, presence of cell interactive domains in hydrophilic polyurethanes gels can balance cell–cell and cell–matrix interactions. These results demonstrate the correlation between lineage commitment and the changes in cell shape, cell–matrix interaction, and cell–cell adhesion during chondrogenic differentiation which is regulated by polyurethane phase morphology, and thus, represent hydrophilic polyurethanes as promising synthetic matrices for cartilage regeneration. [ABSTRACT FROM AUTHOR]