Hydrogels prepared from gelatin and lysine diisocyanate ethyl ester provide tailorable elastic properties and degradation behavior. Their interaction with human aortic endothelial cells (HAEC) as well as human macrophages (MΦ) and granulocytes (GΦ) were explored. The experiments revealed a good biocompatibility, appropriate cell adhesion, and cell infiltration. Direct contact to hydrogels, but not contact to hydrolytic or enzymatic hydrogel degradation products, resulted in enhanced cyclooxygenase-2 (COX-2) expression in all cell types, indicating a weak inflammatory activation in vitro. Only MΦ altered their cytokine secretion profile after direct hydrogel contact, indicating a comparably pronounced inflammatory activation. On the other hand, in HAEC the expression of tight junction proteins, as well as cytokine and matrix metalloproteinase secretion were not influenced by the hydrogels, suggesting a maintained endothelial cell function. This was in line with the finding that in HAEC increased thrombomodulin synthesis but no thrombomodulin membrane shedding occurred. First in vivo data obtained after subcutaneous implantation of the materials in immunocompetent mice revealed good integration of implants in the surrounding tissue, no progredient fibrous capsule formation, and no inflammatory tissue reaction in vivo. Overall, the study demonstrates the potential of gelatin-based hydrogels for temporal replacement and functional regeneration of damaged soft tissue.