Soft nanoparticles represent a unique class of nanomaterials that can be engineered to react and adapt distinctly in different biological milieus while modulating the presentation of biochemical and biophysical cues to neighbouring receptive cells. This flexibility has fuelled the development of soft nanoparticle-laden nanocomposite hydrogels that are increasingly sophisticated in stimuli-responsiveness and promising for satisfying a plethora of biomedical applications. Such hybrid platforms can be encoded with intelligent disease-discerning tools, smart adaptability under external triggers for bioactive cargo delivery or be engineered for manipulating biomechanical properties in different tissue microenvironments. In addition, they can be interfaced with biological components(i.e. enzymes, cell membranes) or specific substrates recognisable by biological machinery, yielding biomolecule-responsive systems that perceive changes in their surroundings and alter their therapeutic outputs accordingly. In essence, this chapter highlights the unique opportunities of soft nanoparticles to function as versatile building blocks for programming and modulating a large array of features in hydrogel-based platforms, thus extending their biofunctionality and applicability in tissue engineering and regenerative medicine practices.