Tissue engineering strategies often aim to direct tissue formation by mimicking conditions progenitor cells experience within native tissues. For example, to create cartilage in vitro, researchers often aim to replicate the biochemical and mechanical milieu cells experience during cartilage formation in the developing limb bud. This includes stimulating progenitors with TGF-β1/3, culturing under hypoxic conditions, and regulating mechanosensory pathways using biomaterials that control substrate stiffness and/or cell shape. However, as progenitors differentiate down the chondrogenic lineage, the pathways that regulate their responses to mechanotransduction, hypoxia and TGF-β may not act independently, but rather also impact one another, influencing overall cell response. Here, to better understand hypoxia’s influence on mechanoregulatory-mediated chondrogenesis, we cultured human marrow stromal/mesenchymal stem cells (hMSC) on soft (0.167 kPa) or stiff (49.6 kPa) polyacrylamide hydrogels in chondrogenic medium containing TGF-β3. We then compared cell morphology, phosphorylated myosin light chain 2 staining, and chondrogenic gene expression under normoxic and hypoxic conditions, in the presence and absence of pharmacological inhibition of cytoskeletal tension. We show that on soft compared to stiff substrates, hypoxia prompts hMSC to adopt more spread morphologies, assemble in compact mesenchymal condensation-like colonies, and upregulate NCAM expression, and that inhibition of cytoskeletal tension negates hypoxia-mediated upregulation of molecular markers of chondrogenesis, including COL2A1 and SOX9. Taken together, our findings support a role for hypoxia in regulating hMSC morphology, cytoskeletal tension and chondrogenesis, and that hypoxia’s effects are modulated, at least in part, by mechanosensitive pathways. Our insights into how hypoxia impacts mechanoregulation of chondrogenesis in hMSC may improve strategies to develop tissue engineered cartilage.