Bone tissue engineering requires a combination of materials, cells, growth factors and mechanical cues to recapitulate bone formation. In this study we evaluated hybrid hydrogels for minimally invasive bone formation by combining biomaterials with skeletal stem cells and staged release of growth factors together with mechanotransduction. Hybrid hydrogels consisting of alginate and decellularized, demineralised bone extracellular matrix (ALG/ECM) were seeded with Stro-1+ human bone marrow stromal cells (HBMSCs). Dual combinations of growth factors within staged-release polylactic-co-glycolic acid (PLGA) microparticles were added to hydrogels to mimic, in part, the signalling events in bone regeneration: VEGF, TGF-β3, PTHrP (fast release), or BMP-2, vitamin D3 (slow release). Mechanotransduction was initiated using magnetic fields to remotely actuate superparamagnetic nanoparticles (MNP) targeted to TREK1 ion channels. Hybrid hydrogels were implanted subcutaneously within mice for 28 days, and evaluated for bone formation using micro-CT and histology. Control hydrogels lacking HBMSCs, growth factors, or MNP became mineralised, and neither growth factors, HBMSCs, nor mechanotransduction increased bone formation. However, structural differences in the newly-formed bone were influenced by growth factors. Slow release of BMP-2 induced thick bone trabeculae and PTHrP or VitD3 increased bone formation. However, fast-release of TGF-β3 and VEGF resulted in thin trabeculae. Mechanotransduction reversed the trabecular thinning and increased collagen deposition with PTHrP and VitD3. Our findings demonstrate the potential of hybrid ALG/ECM hydrogel–cell–growth factor constructs to repair bone in combination with mechanotransduction for fine-tuning bone structure. This approach may form a minimally invasive reparative strategy for bone tissue engineering applications.