Peptide cross-linked poly(ethylene glycol) hydrogel is a promising biomaterial that has been used widely for drug delivery and tissue engineering. However, the use of this material as a biosensor material for the detection of collagenase has not been explored. Collagenase play a key role in rheumatoid arthritis and osteoarthritis. Detection of this class of enzyme using the degradable hydrogel film format is promising as a point-of-care device for disease monitoring. In this study, a biosensor was developed based on the degradation of a peptide cross-linked poly(ethylene glycol) hydrogel film for the detection of collagenase. The hydrogel was deposited on gold-coated quartz crystals and their degradation in the presence of collagenase was monitored using a Quartz Crystal Microbalance (QCM). The biosensor was shown to respond to concentrations between 2 nM to 2000 nM with a lower detection limit of 2 nM.