Poly(ethylene glycol) (PEG) hydrogels with their highly tunable properties are promising implantable materials, but as with all non-biological materials, they elicit a foreign body response (FBR). Recent studies, however, have shown that incorporating the oligopeptide RGD into PEG hydrogels reduces the FBR. To better understand the mechanisms involved and the role of RGD in mediating the FBR, PEG, PEG-RGD and PEG-RDG hydrogels were investigated. After a 28-day subcutaneous implantation in mice, a thinner and less dense fibrous capsule formed around PEG-RGD hydrogels, while PEG and PEG-RDG hydrogels exhibited stronger, but similar FBRs. Protein adsorption to the hydrogels, which is considered the first step in the FBR, was also characterized. In vitro experiments confirmed that serum proteins adsorbed to PEG-based hydrogels and were necessary to promote macrophage adhesion to PEG and PEG-RDG, but not PEG-RGD hydrogels. Proteins adsorbed to the hydrogels in vivo were identified using liquid chromatography-tandem mass spectrometry. The majority (245) of the total proteins (≥300) that were identified was present on all hydrogels with many proteins being associated with wounding and acute inflammation. These findings suggest that the FBR to PEG hydrogels may be mediated by the presence of inflammatory-related proteins adsorbed to the surface, but that macrophages appear to sense the underlying chemistry, which for RGD improves the FBR.