Both temperature and pH responsive drug delivery system was prepared by combining temperature-sensitive poly(vinyl alcohol) (PVA)/poly(N-isopropylacrylamide) (PNIPAAm) microcapsules and pH-sensitive PVA/poly(acrylic acid) (PAAc) hydrogels. The release of drug from the composite hydrogels increased as the pH increased due to the repulsion among the carboxylate anions in the PVA/PAAc hydrogels. The release of drug from the composite hydrogels also increased as the temperature decreased due to the higher hydrophilicity generated below the lower critical solution temperature of PNIPAAm. The compression moduli of composite hydrogels increased with increasing the content of PVA/PNIPAAm microcapsules. The biocompatibility of composite hydrogels was confirmed by the cytotoxicity test.