A cage implant system has been utilized to examine the in vivo biocompatibility of a biodegradable hydrogel, poly(2-hydroxy-ethyl-L-glutamine) (PHEG). This system permits the quantitative determination of the components of the inflammatory exudate which surrounds the implanted polymer within the cage system. This system permits the serial examination of exudate components without sacrificing the animal. In addition, this system allows the subsequent removal of the polymer for surface and mechanical studies. Following implantation of the biodegradable hydrogel, quantitative and differential white cell counts of the exudates were determined over a 21-day period. In addition, concomitant extracellular enzyme analyses for alkaline phosphatase, acid phosphatase, prostatic acid phosphatase, leucine amino-peptidase, and Cathepsin B1 were determined. Corresponding control samples from exudates of the cage implant without the polymer were also determined. The two-tailed Student's t-test for unpaired samples was used to statistically compare the control and implanted polymer values for these respective analyses at the various time periods. A comparison of the cellular response for the control system and the PHEG system did not show statistically significant differences during the first 7 days following implantation. The acute inflammatory response, polymorphonuclear leukocyte predominant, was followed by a mild chronic inflammatory response, macrophage and lymphocyte predominant, and during this time period, 8-14 days, macrophages were present in significantly larger numbers for the PHEG system when compared to the control values. Enzymic analysis of the exudates revealed statistically significant differences between control and PHEG values at time intervals where no differences were noted in cell density or population. These results are discussed in terms of cell-polymer interactions leading to cellular activation and enhanced enzyme exocytosis by the inflammatory cells. Stress-strain measurements on implanted PHEG samples showed that significant in vivo degradation had occurred during the acute inflammatory phase of the response, i.e., the first 7 days.