Cell encapsulating poly(ethylene glycol) hydrogels represent a promising approach for constructing 3D cultures designed to more closely approximate in vivo tissue environment. Improved strategies are needed, however, to optimally balance hydrogel permeability to support metabolic activities of encapsulated cells, while maintaining patternability to restore key aspects of tissue architecture. Herein, we have developed one such strategy incorporating hydrophobic nanoparticles to partially induce looser cross-linking density at the particle-hydrogel interface. Strikingly, our network design significantly increased hydrogel permeability, while only minimally affecting the matrix mechanical strength or prepolymer viscosity. This structural advantage improved viability and functions of encapsulated cells and permitted micron-scale structures to control over spatial distribution of incorporated cells. We expect that this design strategy holds promise for the development of more advanced artificial tissues that can promote high levels of cell metabolic activity and recapitulate key architectural features.