Cellular activities in 3D are differentially affected by several matrix-intrinsic and extrinsic factors. This study highlights the relevance of optimizing initial cell densities when establishing 3D cultures for specific applications. Independently of the entrapping density, MSCs cultured within RGD-alginate hydrogels showed steady-state levels of metabolic activity and were in a nearly non-proliferative state, but recovered “normal” activity levels when retrieved from 3D matrices and re-cultured as monolayers. Importantly, high-densities promoted the establishment of cell–cell contacts with formation of multicellular clusters stabilized by endogenous ECM, and also stimulated MSCs osteogenic differentiation. These MSC-ECM microtissues may be used as building blocks for tissue engineering.