Tough hydrogels with mechanical properties that resemble human soft tissues are promising for applications in biomedical, soft robotics, and biocompatible electronics. However, their synthesis and production may require multi-step processing, their mechanical properties could not be tuned or adjusted for a desirable application, and they may not be biocompatible. This thesis aimed to address these shortfalls by designing a versatile hydrogel system with tuneable properties and a facile one-pot fabrication process. Hydrophilic polyurethane (HPU) was chosen as the physically-crosslinked network, due to its robustness, superior elasticity, and rapid load recovery. Two different strategies were undertaken to develop tough, functional and biocompatible hydrogels from (HPU). In the first strategy, lignin was used as a crosslinker. The addition of lignin enhanced the mechanical properties, broadened the processability of HPU, and enabled 3D printing and fibre spinning of this polymer. In the second strategy, a library of semi-interpenetrating hydrogels comprised of an HPU network and a copolymer crosslinked with long chain crosslinkers that was functionalised with succinimide groups were developed. The addition of succinimide groups allowed the conjugation of proteins to this class of hydrogels to promote biocompatibility. This topology enhanced the degrees of freedom for manipulation of mechanical and physical properties of HPU hydrogel by adjusting the ratio of physically-crosslinked to chemically-crosslinked networks and the composition of the building components in the chemically-crosslinked network. One-pot synthesis, ease of processability and their mechanical properties similar to human soft tissues along with biocompatibility, made this library of hydrogels superior to the existing hydrogels and made them potential candidates for the fabrication of medical devices and soft robotics.