Three-dimensional (3D) printing has enabled benchtop fabrication of customized bioengineered constructs with intricate architectures. Various approaches are being explored to enable optimum integration of such constructs into the physiological environment including addition of bioactive fillers. In this work, we incorporated a corticosteroid drug, dexamethasone (Dex), in a low modulus polyester (SC5050) and examined the effect of Dex incorporation on solvent-, initiator-, and monomer-free pneumatic extrusion-based 3D printing of the polymer. Dex–SC5050 interactions were characterized by plotting thermodynamic binary phase diagrams based on the Flory–Huggins theory. The effect of Dex composition on the 3D printability of the SC5050 polyester was examined by rheological characterization and by image analysis of each layer of the 3D printed scaffolds. The drug release and the degradation of the polymer from the 3D printed scaffolds was used to analyze the effect of Dex composition on the performance of the 3D printed scaffolds. We found that Dex was insoluble in SC5050 polyester at relevant 3D printing temperatures and the insoluble drug particles physically reinforced the polymer, increasing the viscosity and the shear modulus of the base polymer. In addition, the reinforcing effect improved the shape fidelity of the printed filaments and the overall quality of the scaffolds. The Dex particles demonstrated a two-phase release, with an initial burst release and a slower sustained release of drug under in vitro conditions. To investigate preliminary host response of the 3D printed SC5050 scaffolds for tissue engineering applications, the printed scaffolds were implanted subcutaneously in Sprague–Dawley rats for 6 weeks and examined for fibrous tissue formation, infiltration of cells, and vascularization into the pores of the scaffolds.