Modifiable hydrogels have revealed tremendous insight into how physical characteristics of cells’ 3D environment drive stem cell lineage specification. However, in native tissues, cells do not passively receive signals from their niche. Instead, they actively probe and modify their pericellular space to suit their needs, yet the role of cells’ reciprocal interactions with their pericellular environment when encapsulated within hydrogels remains relatively unexplored. We have shown that human bone marrow stromal cells (hMSC) encapsulated within hydrogels modify their surroundings and that cellular interactions with their own secreted matrix play a role in regulating their fate, suggesting that hMSC participate in a bi-directional interplay between the properties of their 3D milieu and their own secreted pericellular matrix. We have also applied this paradigm to study pathological matrix remodelling using 3D models of the human gut. Using co-cultures with iPSC-derived intestinal organoids, we uncovered an unexpected role for a rare immune cell type called ILC1 in driving gut fibrosis in patients with Crohn’s disease. Our findings demonstrate the potential of using hydrogels in disease modelling and open the possibility of unravelling how pathological matrix remodelling contributes to disease.