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Abstract One of the main components of articular cartilage is the chondrocyte's pericellular matrix (PCM), which is critical for regulating mechanotransduction, biochemical cues, and healthy cartilage development. Here, individual primary human chondrocytes (PHC) are encapsulated and cultured in 50 µm diameter alginate microgels using drop‐based microfluidics. This unique culturing method enables PCM formation and manipulation of individual cells. Over ten days, matrix formation is observed using autofluorescence imaging, and the elastic moduli of isolated cells are measured using AFM. Matrix production and elastic modulus increase are observed for the chondrons cultured in microgels. Furthermore, the elastic modulus of cells grown in microgels increases ≈ten‐fold over ten days, nearly reaching the elastic modulus of in vivo PCM. The AFM data is further analyzed using a Gaussian mixture model and shows that the population of PHCs grown in microgels exhibit two distinct populations with elastic moduli averaging 9.0 and 38.0 kPa. Overall, this work shows that microgels provide an excellent culture platform for the growth and isolation of PHCs, enabling PCM formation that is mechanically similar to native PCM. The microgel culture platform presented here has the potential to revolutionize cartilage regeneration procedures through the inclusion of in vitro developed PCM.