The highly tunable properties of poly(ethylene glycol) (PEG)-based hydrogel systems permit their use in a wide array of regenerative medicine and drug delivery applications. One of the most valuable properties of PEG hydrogels is their intrinsic resistance to protein adsorption and cell adhesion, as it allows for a controlled introduction of desired bioactive factors including proteins, peptides, and drugs. Acrylate-PEG-N-hydroxysuccinimide (Acr-PEG-NHS) is widely utilized as a PEG linker to functionalize bioactive factors with photo-cross-linkable groups. This enables their facile incorporation into PEG hydrogel networks or the use of PEGylation strategies for drug delivery. However, PEG linkers can sterically block integrin binding sites on functionalized proteins and reduce cell-material interactions. In this study we demonstrate that reducing the density of PEG linkers on protein backbones during functionalization results in significantly improved cell adhesion and spreading to bioactive hydrogels. However, this reduction in functionalization density also increases protein loss from the matrix over time due to ester hydrolysis of the Acr-PEG-NHS linkers. To address this, a novel PEG linker, acrylamide-PEG-isocyanate (Aam-PEG-I), with enhanced hydrolytic stability was synthesized. It was found that decreasing functionalization density with Aam-PEG-I resulted in comparable increases in cell adhesion and spreading to Acr-PEG-NHS systems while maintaining protein and bioactivity levels within the hydrogel network over a significantly longer time frame. Thus, Aam-PEG-I provides a new option for protein functionalization for use in a wide range of applications that improves initial and sustained cell-material interactions to enhance control of bioactivity.