Cardiovascular diseases (CVDs) are the leading cause of death among all non-communicable diseases globally. Although expanded polytetrafluoroethylene (ePTFE) has been widely used for larger-diameter vascular graft transplantation, the persistent thrombus formation and intimal hyperplasia of small-diameter vascular grafts (SDVGs) made of ePTFE to treat severe CVDs remain the biggest challenges due to lack of biocompatibility and endothelium. In this study, bi-layered poly(acrylamide-co-2-Acrylamido-2-methyl-1-propanesulfonic acid sodium)-xanthan hydrogel-ePTFE (poly(AAm-co-NaAMPS)-xanthan hydrogel-ePTFE) vascular grafts capable of promoting endothelialization and prohibiting thrombosis were synthesized and fabricated. While the external ePTFE layer of the vascular grafts provided the mechanical stability, the inner hydrogel layer offered much-needed cytocompatibility, hemocompatibility, and endothelialization functions. The interface morphology between the inner hydrogel layer and the outer ePTFE layer was observed by scanning electron microscope (SEM), which revealed that the hydrogel was well attached to the porous ePTFE through mechanical interlocking. Among all the hydrogel compositions tested with cell culture using human umbilical vein endothelial cells (HUVECs), the hydrogel with the molar ratio of 40:60 (NaAMPS/AAm) composition (i.e., Hydrogel 40:60) exhibited the best endothelialization function, as it produced the largest endothelialization area that was three times more than of that of plain ePTFE on day 14, maintained the highest average cell viability, and had the best cell morphology. Hydrogel 40:60 also showed excellent hemocompatibility, prolonged activated partial thromboplastin time (aPTT), and good mechanical properties. Overall, bi-layered poly(AAm-co-NaAMPS)-xanthan hydrogel-ePTFE vascular grafts with the Hydrogel 40:60 composition could potentially solve the critical challenge of thrombus formation in vascular graft transplantation applications.