The traditional hydrogels are prone to break due to the applied stress. The deformation of the implanted hydrogels would result in the loss of structural integrity, leading to the failure of hydrogel functionalities and tissue regeneration. Self-healing hydrogels (AG-UPy), composed of oxidized alginate and ureidopyrimidinone-functionalized gelatin (G-UPy), were developed to address this challenge. These self-healing hydrogels possess two independent healing mechanisms, viz., Schiff base formation and UPy dimerization. These hydrogels were compared with oxidized alginate-gelatin (AG) hydrogels. AG-UPy hydrogels showed effective self-healing in a short time (about 2 min) after applying 800% strain, wherein recovery was not achieved with the AG hydrogel. However, the shear-thinning property of UPy made the AG-UPy hydrogel mechanically weaker than the AG hydrogel. To improve the mechanical strength of the AG-UPy hydrogel, we impregnated poly(ethylene glycol)-poly(urethane)/cloisite nanohybrid (PEG-PU/C) to prepare the AG-UPy/PEG-PU/C hydrogel. The incorporation of PEG-PU/C resulted in a 20-fold increase in the compression strength compared to that of the AG-UPy hydrogel. The AG-UPy/PEG-PU/C hydrogels also showed rapid self-healing. Incorporating the nanohybrid improved the cell proliferation by 2-and 1.25-fold compared to that of the AG and AG-UPy hydrogels, respectively. Therefore, PEG-PU/C combined with the UPy-functionalized polymer could be used to modulate mechanical strength and self-healing and enhance cell proliferation. © 2021 American Chemical Society.