Graphical abstract Highlights • We fabricated a BMSCs-encapsulating collagen-based 3D hydrogel scaffold in one step. • The hydrogel was formed from collagen and hyaluronic acid by photo-crosslinking. • The osteogenic differentiation of BMSCs in hydrogel was obtained even without BMP-2. Abstract Many patients suffer from bone injury and self-regeneration is not effective. Developing new strategies for effective bone injury repair is highly desired. Herein, collagen, an important component of the extracellular matrix, was modified with glycidyl methacrylate. The water solubility and photochemical cross-linking ability of the resulting collagen derivative was then improved. Thereafter, BMSC-laden hydrogel was fabricated using collagen modified with glycidyl methacrylate and hyaluronic acid modified with methacrylic anhydride under UV light in the presence of I 2959. The physicochemical properties were characterized suggesting that the hydrogel had great potential for enhancing cell adhesion and proliferation. Furthermore, without adding the bone morphogenetic protein-2, the collagen also promoted osteogenic differentiation of BMSCs within the hydrogel. Altogether, this hydrogel system provides a general strategy to fabricate cell-encapsulating hydrogel based on collagen and could be used as 3D scaffold for bone injury repair. [ABSTRACT FROM AUTHOR]