This study adopts a combined computational and experimental approach to determine the mechanical, structural, and metabolic properties of isolated chondrocytes cultured within three-dimensional hydrogels. A series of linear elastic and hyperelastic finite-element models demonstrated that chondrocytes cultured for 24 h in gels for which the relaxation modulus is <5 kPa exhibit a cellular Young's modulus of ∼5 kPa. This is notably greater than that reported for isolated chondrocytes in suspension. The increase in cell modulus occurs over a 24-h period and is associated with an increase in the organization of the cortical actin cytoskeleton, which is known to regulate cell mechanics. However, there was a reduction in chromatin condensation, suggesting that changes in the nucleus mechanics may not be involved. Comparison of cells in 1% and 3% agarose showed that cells in the stiffer gels rapidly develop a higher Young's modulus of ∼20 kPa, sixfold greater than that observed in the softer gels. This was associated with higher levels of actin organization and chromatin condensation, but only after 24 h in culture. Further studies revealed that cells in stiffer gels synthesize less extracellular matrix over a 28-day culture period. Hence, this study demonstrates that the properties of the three-dimensional microenvironment regulate the mechanical, structural, and metabolic properties of living cells.