The dynamic nature of cellular microenvironments, regulated by the viscoelasticity and enzymatic cleavage of the extracellular matrix, remains challenging to emulate in engineered synthetic biomaterials. To address this, a novel platform of cell-instructive hydrogels is introduced, composed of two concurrently forming interpenetrating polymer networks (IPNs). These IPNs consist of the same basic building blocks – four-armed poly(ethylene glycol) and the sulfated glycosaminoglycan (sGAG) heparin – are cross-linked through either chemical or physical interactions, allowing for precise and selective tuning of the hydrogel's stiffness, viscoelasticity, and proteolytic cleavability. The studies of the individual and combined effects of these parameters on stem cell behavior revealed that human mesenchymal stem cells exhibited increased spreading and Yes-associated protein transcriptional activity in more viscoelastic and cleavable sGAG-IPN hydrogels. Furthermore, human induced pluripotent stem cell (iPSC) cysts displayed enhanced lumen formation, growth, and pluripotency maintenance when cultured in sGAG-IPN hydrogels with higher viscoelasticity. Inhibition studies emphasized the pivotal roles of actin dynamics and matrix metalloproteinase activity in iPSC cyst morphology, which varied with the viscoelastic properties of the hydrogels. Thus, the introduced sGAG-IPN hydrogel platform offers a powerful methodology for exogenous stem cell fate control.