In this article, we demonstrated a novel injectable polymer matrix: honokiol (HK) loaded poly (epsilon-caprolactone)-poly(ethylene glycol)-poly(epsilon-caprolactone) (PCL-PEG-PCL, PCEC) nanoparticles in thermosensitive poly(ethylene glycol)-poly(epsilon-caprolactone)-poly(ethylene glycol) (PEG-PCL-PEG, PECE) hydrogel for the drug local delivery. First, HK, as a model hydrophobic drug, was loaded into PCL-PEG-PCL nanoparticles by emulsion solvent evaporation method to overcome its poor water solubility. Then, the HK-loaded PCEC nanoparticles (HK-PCEC) were incorporated into thermosensitive PEG-PCL-PEG hydrogel, which was sol at low temperature and could gel as a depot for sustained release of drug in situ after topical injection. The HK-PCEC incorporated PECE hydrogel (HK-PCEC-PECE) was biodegradable and could be gradually eliminated from the injection site in about 2 weeks after subcutaneously injected into mice. The in vitro release studies indicated that HK could be released from HK-PCEC and HK-PCEC-PECE in a sustained manner. Such biodegradable smart drug-delivery system might have great potential application in injectable hydrophobic drug local delivery system.