- Differentiation of human embryonic stem cells (hESCs) can be instigated through the formation of embryo‐like aggregates in suspension, termed human embryoid bodies (hEBs). Controlling cell aggregation and agglomeration during hEBs formation has a profound effect on the extent of cell proliferation and differentiation. In a previous work, we showed that control over hEBs formation and differentiation can be achieved via cultivation of hESC suspensions in a rotating bioreactor system. We now report that hEBs can be generated directly from hESC suspensions within three‐dimensional (3D) porous alginate scaffolds. The confining environments of the alginate scaffold pores enabled efficient formation of hEBs with a relatively high degree of cell proliferation and differentiation; encouraged round, small‐sized hEBs; and induced vasculogenesis in the forming hEBs to a greater extent than in static or rotating cultures. We therefore conclude that differentiation of hEBs can be induced and directed by physical constraints in addition to chemical cues. © 2004 Wiley Periodicals, Inc.