Carboxymethyl chitosan (CMC)-based hydrogels (HG) have gained significant attention for therapeutic applications due to their biomimetic properties and biocompatibility. This study explores, for the first time, the regenerative and osteogenic potential of CMC-HG incorporated with a marine fungi-derived fibrinolytic compound, FGFC-1. The inclusion of FGFC-1 did not significantly alter the crucial characteristics of the HGs, including secondary structure, thermal stability, protein adhesion, and in vitro degradation. However, incorporation of FGFC1 increased the swelling capacity (from 132.88 % to 157.11 %) and decreased the mineral adhesion (0.416 at 0.1 mg/ml) and porosity (from 72.95 % to 54.29 %). In general, the bacterial adhesion was decreased by 44.3 % in HG than control., Optimal culture conditions for mesenchymal stem cells (MSCs) were achieved with 2 % CMC and FGFC-1 concentrations of 0.01–1 mg/ml (Appendix A), supporting significant MSC growth. SEM image proved more interconnected dense fibrillar clustered morphology of MSCs on HGs than 2D. FGFC-1 accelerated osteogenic differentiation of MSCs by increasing mRNA expression levels of Runx2 (4.98), collagen-1 alpha-1 (3.4), osteocalcin (3.62), and ALP (4.20), which was further validated through enhanced staining for alizarin red, von Kossa, and alkaline phosphatase, as well as immunostaining for osteocollagen and osteocalcin in differentiated MSCs within the hydrogels. Notably, FGFC-1 significantly induced osteogenic differentiation along with supplements. These findings highlight FGFC-1-loaded CMC hydrogels as a promising strategy for stem cell-mediated bone regeneration in biomedical applications.