Here we report on covalently immobilized poly(ethyl acrylate-co-methacrylic acid) microgels loaded with the host defense peptide KYE28 (KYEITTIHNLFRKLTHRL-FRRNFGYTLR), which is derived from human heparin cofactor II, as well as its poly(ethylene glycol)-conjugated (PEGylated) version, KYE28PEG. Peptide loading and release, as well as the consequences of these processes on the microgel and peptide properties, were studied by in situ ellipsometry, confocal microscopy, zeta potential measurements, and circular dichroism spectroscopy. The results show that the microgel peptide interactions are electrostatically dominated, thus promoted at higher microgel charge density, while PEGylation suppresses peptide binding. PEGylation also enhances the alpha-helix induction observed for KYE28 upon microgel incorporation. Additionally, peptide release is facilitated at physiological salt concentration, particularly so for KYE28PEG, which illustrates the importance of electrostatic interactions. In vitro studies on Escherichia coli show that the microgel-modified surfaces display potent antifouling properties in both the absence and presence of the incorporated peptide. While contact killing dominates at low ionic strength for the peptide-loaded microgels, released peptides also provide antimicrobial activity in bulk at a high ionic strength. Additionally, KYE28- and KYE28PEG-loaded microgels display anti-inflammatory effects on human monocytes. Taken together, these results not only show that surface-bound microgels offer an interesting approach for local drug delivery of host defense peptides but also illustrate the need to achieve high surface loads of peptides for efficient biological effects.