Poly(lactic-co-glycolic acid) (PLGA) based biomaterials for soft tissue engineering have inherent disadvantages, such as a relative rigidity and a limited variability in the mechanical properties and degradation rates. In this study, a novel electrospun biomaterial based on degradable polyesterurethane (PEU) (DegraPol(®) ) was investigated for potential use for bladder engineering in vitro and in vivo. Hybrid microfibrous PEU and PLGA scaffolds were produced by direct electrospinning of the polymer onto a bladder acellular matrix. The scaffold morphology of the scaffold was analyzed, and the biological performance was tested in vitro and in vivo using a rat cystoplasty model. Anatomical and functional outcomes after implantation were analyzed macroscopically, histologically and by cystometry, respectively. Scanning electron microscopy analysis showed that PEU samples had a lower porosity (p < 0.001) and were slightly thinner (p = 0.009) than the PGLA samples. Proliferation and survival of the seeded smooth muscle cells in vitro were comparable on PEU and PLGA scaffolds. After 8 weeks in vivo, the PEU scaffolds exhibited no shrinkage. However, cystometry of the reconstructed bladders exhibited a slightly greater functional bladder capacity in the PLGA group. Morphometric analyses revealed significantly better tissue healing (p < 0.05) and, in particular, better smooth muscle regeneration, as well as a lower rate of inflammatory responses at 8 weeks in the PEU group. Collectively, the results indicated that PEU-hybrid scaffolds promote bladder tissue formation with excellent tissue integration and a low inflammatory reaction in vivo. PEU is a promising biomaterial, particularly with regard to functional tissue engineering of the bladder and other hollow organs. © 2015 Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater, 2015.