Mesenchymal stem cells (MSCs) have been targeted for use in cell-based therapies, regenerative medicine, and tissue engineering. For MSCs to be utilized in these applications, further elucidation of environmental and biochemical stimuli directing differentiation is needed. A limitation to studying directed MSC differentiation is that traditional culture systems represent a heterogeneous population. The objective of this study is to understand specific environmental cues and signals directing differentiation. To achieve this goal, we created a three-dimensional poly (ethylene glycol) diacrylate (PEGDA) based microenvironment that supports cell and signal placement controlled by laser tweezers. PEGDA environments allow transport of small molecules, demonstrate biocompatibility, and are easily modified. Laser tweezers manipulate cells and place them in any desired location. Coupled with photopolymerizable hydrogels, they provide control of the cellular environment by specific placement of cells and signals. U937 cells were used to develop hydrogel microenvironments since they are easily differentiated into macrophages by small molecules (phorbol 12- myrisate 13-acetate; PMA). Visual monitoring systems utilizing fluorescent reporter vectors were created to analyze cellular activity by transfecting a GFP reporter gene controlled by a CMV promoter. Differentiation was monitored by transfecting a DsRed gene driven by PMA induced TNFα and osteopontin promoters. RT- PCR analysis shows that 50 nM PMA stimulation results in upregulation of TNFα and osteopontin expression within 2 and 4 hours, rapidly detecting differentiation. Optimal microenvironments have adequate PEGDA pore size, molecule diffusion, and minimal cell death from UV exposure, photoinitiator, or laser manipulation. Microenvironments were optimized by placing U937 cells in 5%-10% of 400 mW or 3.4 kDa hydrogel with 0.1%-0.2% photoinitiator and polymerized with UV light for 10-15 seconds. Fluorescence microscopy analysis of GFP expression and Molecular Probes Live/Dead kit indicate that cellular metabolic activity was optimized with 5% 3.4 kDa PEGDA, 0.2% photoinitiator and 15 seconds UV exposure. Lower PEGDA concentrations (5% 3.4 kDa) displayed higher metabolic activity (45%) compared to 8-10% PEGDA concentrations (30%) 48 hours after trapping in hydrogel. These data demonstrate that U937 cells remain metabolically active in hydrogel for sufficient time to monitor differentiation. After development of optimal microenvironments, cells were manipulated with laser tweezers into 3x3 arrays and monitored for cellular activity. One hour after trapping, all cells remained metabolically active. After trapping, cells remained 55% metabolically active after 48 hours, reflecting similar metabolic activity to non-arrayed cells in hydrogel (45%) and reflecting that laser manipulation does not affect cellular activity. Lastly, differentiation in hydrogel was demonstrated by adding 50 nM PMA to the culture medium and monitored by visualization of DsRed fluorescence. After complete optimization of microenvironments using U937 cells, MSCs will be encapsulated in hydrogel and cultured with lineage-specific differentiation signals. In conclusion, we have created a cellular microenvironment system where the use of laser trapping in conjunction with a PEGDA microenvironment provides a platform for studying directed differentiation of MSCs.