Tumor development and progression involve biophysical changes across spatial scales, from the subcellular to the multicellular tissue scale. While cells are known to dynamically regulate their volumes and mechanics in dependence of cell state and function, it is unclear how these properties are controlled in dense multicellular environments like developing tumors. Here, we quantified cell and nuclear volumes of cancer cells forming multicellular spheroids within mechanically tunable biohybrid polymer hydrogels. We quantitatively showed that formation of multicellular structures is associated with marked reductions of cellular and nuclear volumes, cell cycle delays as well as cell mechanical alterations, and that these changes are coupled. Single-to-multicellular transitions led to up to 60% decreases in median nuclear volumes, which was not explained by growth-induced compressive stress. Instead, nuclear volume reductions in emerging clusters arose from cell cycle adaptations, with accumulation of smaller G1-phase cells—reversed by CDK1 inhibition. Additional nuclear downsizing in forming clusters was associated with cell mass density and stiffness increases and reverted upon cell release. Conversely, multicellular-to-single cell transitions during invasion were accompanied by nuclear volume expansion and cell softening. Together, these findings reveal dynamic regulation of cellular and nuclear volumes, mechanics, and cell cycle progression in response to multicellular state.