Delivery of bioactive molecules is a critical step in fabricating materials for regenerative medicine, yet, this step is particularly challenging in hydrated scaffolds such as hydrogels. Although bulk photocrosslinked poly(ethylene glycol) (PEG) hydrogels have been used for a variety of tissue engineering applications, their capability as drug delivery scaffolds has been limited due to undesirable release profiles and reduction in bioactivity of molecules. To solve these problems, this article presents the fabrication of degradable PEG microgels, which are micron-sized spherical hydrogels, to deliver bioactive nerve growth factor (NGF). NGF release and activity was measured after encapsulation in microgels formed from either 3 kDa or 6 kDa PEG to determine the role of hydrogel mesh size on release. Microgels formed from 6 kDa PEG were statistically larger and had a higher swelling ratio than 3 kDa PEG. The 6 kDa PEG microgels provided a Fickian release with a reduced burst effect and 3 kDa microgels provided anomalous release over ≥20 days. Regardless of molecular weight of PEG, NGF bioactivity was not significantly reduced compared to unprocessed NGF. These results demonstrate that microgels provide easy mechanisms to control the release while retaining the activity of growth factors. As this microgel-based delivery system can be injected at the site of nerve injury to promote nerve repair, the potential to deliver active growth factors in a controlled manner may reduce healing time for neural tissue engineering applications.