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Periodontal disease may cause considerable destruction of alveolar bone, periodontal ligaments (PDLs) and cementum and even lead to progressive oral dysfunction. Periodontal tissue regeneration is the ultimate goal of periodontal disease treatment to reconstruct both structures and functions. However, the regenerative efficiency is low, possibly due to the lack of a proper periodontal microenvironment. In this study, we applied an injectable and thermosensitive chitosan/gelatin/glycerol phosphate hydrogel to provide a 3D environment for transplanted stem cells and to enhance stem cell delivery and engraftment. The iPSCs-BMP-6-hydrogel complex promoted osteogenesis and the differentiation of new connective tissue and PDL formation. In animal models of maxillary-molar defects, the iPSCs-BMP-6-hydrogel-treated group showed significant mineralization with increased bone volume, trabecular number and trabecular thickness. Synergistic effects of iPSCs and BMP-6 increased both bone and cementum formation. IPSCs-BMP-6-hydrogel-treated animals showed new bone synthesis (increased ALP- and TRAP-positive cells), new PDL regeneration (shown through Masson’s trichrome staining and a qualification assay), and reduced levels of inflammatory cytokines. These findings suggest that hydrogel-encapsulated iPSCs combined with BMP-6 provide a new strategy to enhance periodontal regeneration. This combination not only promoted stem cell-derived graft engraftment but also minimized the progress of inflammation, which resulted in highly possible periodontal regeneration.