Currently no clinical successful technique exists to halt the degeneration of articular cartilage due to a cartilage defect. Biodegradable hydrogel scaffolds, elastic and porous cross-linked polymers, have been investigated for cartilage replacement, providing a matrix through which chondrocytes can grow. However, the mechanical properties and porosity of fully degradable scaffolds are insufficient to support tissue generation. A solution may be the use of non-degradable hydrogels containing degradable microparticles, loaded with growth factors, to encourage cell growth into the matrix. Hydrogels of poly(vinyl alcohol) were physically cross-linked through freeze-thaw cycling, and the mechanical properties and network microstructure were examined over the course of three weeks in swelling in a solution of poly(ethylene glycol) with an osmotic pressure similar to articular cartilage. Because of the high viscosity of the aqueous hydrogel solution, water added prior to cross-linking was immiscible, creating a high degree of porosity in the material, analyzed by environmental scanning electron microscopy. Interestingly, when the hydrogels were soaked in osmotic solution, the water content decreased yet the hydrogels became more porous, a phenomenon that is opposite to most hydrated materials. The microparticles also degraded, releasing growth factor and creating additional pores in the matrix. The material was evaluated for its ability to replace cartilage in terms of its mechanical properties, the most important function of healthy cartilage. The porosity of the material was also examined because it will be important for the cells of surrounding cartilage to migrate into and proliferate throughout the matrix, resulting in an integrated hydrogel-cartilage construct.