Hydrogels are a continuously expanding class of pharmaceutical polymers designed for sustained or controlled drug release. The structure and intermolecular interactions in such systems define their macroscopic properties. The aim of this study was to investigate the mechanism of swelling, drug impregnation, and drug release from poly(ethylene oxide) (PEO) gel crosslinked by urethane bonds. A combination of SAXS/WAXS/SANS techniques enabled us to determine the phase transition between lamellar and extended gel network, and to apply different descriptions of crystallinity, based on lamellar and crystal lattice structures. It is shown that even low (1–7% w/w) loading of model drugs acetaminophen and caffeine, produced significant disorder in the polymer matrix. This effect was particularly pronounced for acetaminophen due to its specific ability to form complexes with PEO. The drug-release profiles were analyzed using a general cubic equation, proposed for this work, which allowed us to determine the gel hydration velocity. The results indicate that the release profiles correlate inversely with the polymer crystallinity.