For 3D neural cultures durable hydrogels are required, which persist over a long differentiation period and thus enable the maturation of neuronal networks (NN). Here, 3D models based on human induced pluripotent stem cell‐derived neural progenitor cells that are embedded in hydrogels of either pure alginate or alginate functionalized with the extracellular matrix protein laminin 111 (L111) are established. This study analyzes material characteristics such as porosity, L111 distribution and shear viscosity, cell compatibility of hydrogels by measuring viability and cytotoxicity, and neural function by monitoring cell migration, differentiation as well as NN formation and activity on multielectrode arrays. The addition of L111 increases neural migration and enhances differentiation into neurons and astrocytes as well as synaptogenesis in alginate hydrogels. NN formed in hydrogels are electrically active for up to 206 d and L111‐supplementation further increases electrical activity, network maturation, and synchronicity compared to 2D controls and NN grown in pure alginate hydrogels. L111 addition to alginate gels further accelerates recovery of electrical activity after blockage of sodium channels with tetrodotoxin. In conclusion, NN grown in alginate‐L111 hydrogel blends are promising models for future long‐term applications in disease modeling, drug or chemical evaluation.