Due to sensor -tissue interactions, currently none of the commercially available glucose sensors are capable of continuous, reliable monitoring of glucose levels during long-term implantation. In order to improve the lifetime of implanted glucose sensors, two series of biocompatible novel hydrogel coatings were designed, synthesized and the physical properties were measured. Different hydrogels with various 2,3-dihydroxypropyl methacrylate (DHPMA) compositions were coated onto glucose sensors. Results show that the higher freezable water content, swelling rate and uniform porosity that resulted from high DHPMA content increased the sensitivity and shortened the response time of glucose sensors. The linear range of a glucose sensor coated only with hydrogel is short, however, the range can be improved by coating the epoxy- polyurethane (PU) with a layer of hydrogel. Since the hydrogel minimizes the fibrosis and inflammation, it shows promise for use in implantable glucose sensors. However, the in vivo experiment shows only 25% of sensors still worked after 4 weeks. In order to overcome problems present in the first series of experiments, another series of novel hydrogels with various N-vinyl pyrolidone (VP) contents was developed. This study has provided a feasible approach to design and select the properties of the copolymer for coating implantable biosensors. The in vivo experiments demonstrate that a hydrogel coating significantly improved the performance of implanted glucose sensors. In order to suppress the acute inflammation caused by the surgery, dexamethasone-21 phosphate disodium salt (DX-21) was incorporated to a series of poly (HEMA-DHPMA-VP) hydrogels to investigate the drug delivery in vitro. All hydrogels showed a high initial release, followed by slow, long term release during the next hours to days. This release pattern is believed to be optimum for implanted glucose sensors suppressing the acute and chronic inflammation. Water structures in hydrogels swollen in different media water, PBS and DX-21 solution were also investigated. 1HEMA:1DHPMA copolymer and VP-HEMA-DHPMA copolymers imbibed higher freezable water fractions in DX-21 solution. The ratio of transporting water mass to DX-21 mass is 9.6 which is independent of the hydrogel composition.