Stimuli-responsive hydrogels with high strength and toughness have received significant interest in recent years. Here, we report thermally active composite hydrogels comprising alginate and one of two poly(ethylene oxide)-poly(propylene oxide)-poly(ethylene oxide) (PEO-PPO-PEO) triblock copolymers. Temperature-sensitive structural and mechanical changes are probed using calorimetry, neutron scattering, shear rheology, unconfined compression, and fracture. Below the lower gelation temperature, LGT, the mechanical properties are dominated by alginate. As the LGT is reached, the contribution of PEO-PPO-PEO to the mechanical properties is activated, resulting in order-of-magnitude increases in elastic modulus. Under compression, we show the evolution of plasticity for the composite hydrogels as the LGT is approached and surpassed, resulting in dramatic increases in fracture stress compared to neat alginate hydrogels. Plasticity was observed above the LGT and may be attributed to restructuring from the sliding of packed micelles and strain-hardening due to stress concentration on alginate cross-links and junction zones, ultimately leading to fracture.