The development of hydrogel-based biomaterials represents a promising approach to generating new strategies for tissue engineering and regenerative medicine. In order to develop more sophisticated cell-seeded hydrogel constructs, it is important to understand how cells mechanically interact with hydrogels. In this paper, we review the mechanisms by which cells remodel hydrogels, the influence that the hydrogel mechanical and structural properties have on cell behaviour and the role of mechanical stimulation in cell-seeded hydrogels. Cell-mediated remodelling of hydrogels is directed by several cellular processes, including adhesion, migration, contraction, degradation and extracellular matrix deposition. Variations in hydrogel stiffness, density, composition, orientation and viscoelastic characteristics all affect cell activity and phenotype. The application of mechanical force on cells encapsulated in hydrogels can also instigate changes in cell behaviour. By improving our understanding of cell-material mechano-interactions in hydrogels, this should enable a new generation of regenerative medical therapies to be developed.