Artificial cells can shed new light on the molecular basis for life and hold potential for new chemical technologies. Inspired by how nature dynamically regulates its membrane compartments, we aim to repurpose the endosomal sorting complex required for transport (ESCRT) to generate complex membrane architectures as suitable scaffolds for artificial cells.Purified ESCRT-III components perform topological transformations on giant unilamellar vesicles (GUVs) to create complex "vesicles-within-a-vesicle" architectures resembling the compartmentalisation in eukaryotic cells. Thus far, the proposed mechanisms for this activity are based on how assembly and disassembly of ESCRT-III on the membrane drives deformation. Here we demonstrate the existence of a negative feedback mechanism from membrane mechanics that regulates ESCRT-III activity. ILV formation removes excess membrane area, increasing tension, which in turn suppresses downstream ILV formation.This mechanism for in vitro regulation of ESCRT-III activity may also have important implications for its in vivo functions.