Periodontitis is a chronic inflammatory disease that causes gum tissue degeneration and alveolar bone and tooth loss. The aim of this study is to develop a multifunctional matrix for the treatment of periodontitis and enhancement of regeneration of the periodontal tissue. The matrix was prepared from vitamin E containing hydrogel made of alginate and gelatin, and doxycycline HCl containing methoxy poly(ethylene glycol)-block-polycaprolactone micelles. Methoxy poly(ethylene glycol)-block-polycaprolactone was synthesized with ring-opening polymerization technique and characterized by proton nuclear magnetic resonance (H-1 NMR), Fourier-transform infrared spectroscopy, differential scanning calorimetry, and gel permeation chromatography. Micelles were characterized by measuring zeta potential, hydrodynamic diameter, drug encapsulation efficiency, drug loading capacity, and in vitro drug-release kinetics. Micelles were obtained with an average size of 164 nm and drug loading amount of 5.8%. The activity of doxycycline HCl-loaded micelles and vitamin E containing hydrogels was determined against Escherichia coli (E. coli) and Staphylococcus aureus (S. aureus) with disk diffusion method. Bio-efficacy of micelle-loaded alginate-gelatin hydrogels were tested in vitro using L929 fibroblasts and dental pulp stem cells. Doxycycline HCl-loaded micelles and vitamin E containing hydrogels showed a sustained release and exhibited inhibition zone against E. coli and S. aureus. Hydrogels with vitamin E and doxycycline HCl-loaded micelles promoted osteogenic differentiation of dental pulp stem cells. Results suggest that alginate-gelatin hydrogels containing doxycycline HCl-loaded micelles and vitamin E can be good candidates for the treatment of periodontitis and tissue regeneration.