A combination of topographical cues and controlled release of biochemical factors is a potential platform in controlling stem cells differentiation. In this study the synergistic effect of nanotopography and sustained release of biofunctional transforming growth factor beta 1 (TGF-β1) on differentiation of human Wharton's Jelly-derived mesenchymal stem cell (hWJ-derived UC-MSCs) toward myogenic lineage was investigated. In order to achieve a sustained release of TGF-β1, this factor was encapsulated within chitosan nanoparticles. Afterwards the aligned composite mats were fabricated using poly-ɛ-caprolacton (PCL) containing TGF-β1-loaded chitosan nanoparticles and poly-L-lactic acid (PLLA). The nanofiber topography notably up-regulated the expressions of calponin1 and SM22α compared with tissue culture polystyrene (TCP). Moreover, the combination of nanofiber topography and sustained TGF-β1release resulted in more significant enhancement of SMC marker, in particular smooth muscle α-actin (ASMA) expression, compared with bolus delivery despite lower amounts of TGF-β1 (>10 times lower). Additionally, immunofluorescence staining showed that ASMA and desmin were expressed at higher intensity in cells exposed to controlled TGF-β1 delivery rather than bolus delivery. These results demonstrated the importance of combined effect of topography and drug delivery in directing stem cell fate and the potential of such biofunctional scaffolds for cell transplantation applications in bladder tissue engineering. © 2016 Wiley Periodicals, Inc. J Biomed Mater Res Part A: 104A: 1610-1621, 2016.