Control of self-renewal and differentiation of human ES cells (hESCs) remains a challenge. This is largely due to the use of culture systems that involve poorly defined animal products and do not mimic the normal developmental milieu. Routine protocols involve the propagation of hESCs on mouse fibroblast or human feeder layers, enzymatic cell removal, and spontaneous differentiation in cultures of embryoid bodies, and each of these steps involves significant variability of culture conditions. We report that a completely synthetic hydrogel matrix can support (i) long-term self-renewal of hESCs in the presence of conditioned medium from mouse embryonic fibroblast feeder layers, and (ii) direct cell differentiation. Hyaluronic acid (HA) hydrogels were selected because of the role of HA in early development and feeder layer cultures of hESCs and the controllability of hydrogel architecture, mechanics, and degradation. When encapsulated in 3D HA hydrogels (but not within other hydrogels or in monolayer cultures on HA), hESCs maintained their undifferentiated state, preserved their normal karyotype, and maintained their full differentiation capacity as indicated by embryoid body formation. Differentiation could be induced within the same hydrogel by simply altering soluble factors. We therefore propose that HA hydrogels, with their developmentally relevant composition and tunable physical properties, provide a unique microenvironment for the self-renewal and differentiation of hESCs.