Stem cell therapies are limited by poor cell survival and engraftment. A hurdle to the use of materials for cell delivery is the lack of understanding of material properties that govern transplanted stem cell functionality. Here, we show that synthetic hydrogels presenting integrin-specific peptides enhance the survival, persistence, and osteo-reparative functions of human bone marrow-derived mesenchymal stem cells (hMSCs) transplanted in murine bone defects. Integrin-specific hydrogels regulate hMSC adhesion, paracrine signaling, and osteoblastic differentiation in vitro. Hydrogels presenting GFOGER, a peptide targeting α2β1 integrin, prolong hMSC survival and engraftment in a segmental bone defect and result in improved bone repair compared to other peptides. Integrin-specific hydrogels have diverse pleiotropic effects on hMSC reparative activities, modulating in vitro cytokine secretion and in vivo gene expression for effectors associated with inflammation, vascularization, and bone formation. These results demonstrate that integrin-specific hydrogels improve tissue healing by directing hMSC survival, engraftment, and reparative activities.