The objective of the present study was to develop 2-hydroxypropyl methacrylate-co-polyethylene methacrylate [p(HPMA-co-PEG-MEMA)] hydrogels that are able to efficiently entrap doxorubicin for the application of loco-regional control of the cancer disease. Systemic chemotherapy provides low clinical benefit while localized chemotherapy might provide a therapeutic advantage. In this study, effects of hydrogel properties such as PEG chains length, cross-linking density, biocompatibility, drug loading efficiency, and drug release kinetics were evaluated in vitro for targeted and controlled drug delivery. In addition, the characterization of the hydrogel formulations was conducted with swelling experiments, permeability tests, Fourier transform infrared, SEM, and contact angle studies. In these drug-hydrogel systems, doxorubicin contains amine group that can be expected a strong Lewis acid-base interaction between drug and polar groups of PEG chains, thus the drug was released in a timely fashion with an electrostatic interaction mechanism. It was observed that doxorubicin release from the hydrogel formulations decreased when the density of cross-linking, and drug/polymer ratio were increased while an increase in the PEG chains length of the macro-monomer (i.e. PEG-MEMA) in the hydrogel system was associated with an increase in water content and doxorubicin release. The biocompatibility of the hydrogel formulations has been investigated using two measures: cytotoxicity test (using lactate dehydrogenase assay) and major serum proteins adsorption studies. Antitumor activity of the released doxorubicin was assessed using a human SNU398 human hepatocellular carcinoma cell line. It was observed that doxorubicin released from all of our hydrogel formulations which remained biologically active and had the capability to kill the tested cancer cells.