Micro- and nanoscale technologies are emerging as powerful tools for controlling the interaction between cells and their surroundings for biological studies, tissue engineering, and cell-based screening. In addition, hydrogel biomaterials have been increasingly used in various tissue engineering applications since they provide cells with a hydrated 3D microenvironment that mimics the native extracellular matrix. In our lab we have developed various approaches to merge microscale techniques with hydrogel biomaterials for directing stem cell differentiation and generating complex 3D tissues. In this talk, I will outline our work in controlling the cell-microenvironment interactions by using patterned hydrogels to direct the differentiation of stem cells. In addition, I will describe the fabrication and the use of microscale hydrogels for tissue engineering by using a `bottom-up' and a `top-down' approach. Top-down approaches for fabricating complex engineered tissues involve the use of miniaturization techniques to control cell-cell interactions or to recreate biomimetic microvascular networks within mesoscale hydrogels. Our group has also pioneered bottom-up approaches to generate tissues by the assembly of shape-controlled cell-laden microgels (i.e. tissue building blocks), that resemble functional tissue units. In this approach, microgels were fabricated and seeded with different cell types and induced to self assemble to generate 3D tissue structures with controlled microarchitecture and cell-cell interactions.