Homeostasis of hematopoietic stem and progenitor cells (HSPC) is controlled by a combination of biochemical and biophysical environmental cues in the bone marrow (BM) niche, where a tight balance of quiescence and proliferation of HSPC is maintained. Specifically, alongside soluble factors and extracellular matrix (ECM) proteins, spatial confinement and ECM stiffness have been recognized to be critical for regulation of HSPC fate. Here we employ a modular, glycosaminoglycan (GAG)-based biohybrid hydrogel system to balance proliferation of human HSPC and maintenance of quiescent hematopoietic stem cells (HSC) through simultaneous regulation of exogenous biochemical and biophysical cues. Our results demonstrate that HSPC respond to increased spatial confinement with lowered proliferation and cell cycling, which results in higher frequency of quiescent LTC-IC (long-term culture initiating cells), while GAG-rich 3D environments further support maintenance of the cells.