Hydrogels are polymeric materials distinguished by high water content and diverse physical properties. They can be engineered to resemble the extracellular environment of the body's tissues in ways that enable their use in medical implants, biosensors, and drug-delivery devices. Cell-compatible hydrogels are designed by using a strategy of coordinated control over physical properties and bioactivity to influence specific interactions with cellular systems, including spatial and temporal patterns of biochemical and biomechanical cues known to modulate cell behavior. Important new discoveries in stem cell research, cancer biology, and cellular morphogenesis have been realized with model hydrogel systems premised on these designs. Basic and clinical applications for hydrogels in cell therapy, tissue engineering, and biomedical research continue to drive design improvements using performance-based materials engineering paradigms.