The biophysical microenvironment of cells dynamically evolves during embryonic development, leading to defined tissue specification. A versatile and highly adaptive magneto‐responsive hydrogel system composed of magnetic nanorods (MNRs) and a stress‐responsive polymeric matrix is developed to dynamically regulate the physical stem cell niche. The anisotropic magnetic/shape factor of nanorods is utilized to maximize the strains on the polymeric network, thus regulating the hydrogel modulus in a physiologically relevant range under a minimal magnitude of the applied magnetic fields below 4.5 mT. More significantly, the pre‐alignment of MNRs induces greater collective strains on the polymeric network, resulting in a superior stiffening range, over a 500% increase as compared to that with randomly oriented nanorods. The pre‐alignment of nanorods also enables a fast and reversible response under a magnetic field of the opposite polarity as well as spatially controlled heterogeneity of modulus within the hydrogel by applying anisotropic magnetic fields. The mechano‐modulative capability of this system is validated by a mechanotransduction model with human‐induced pluripotent stem cells where the locally controlled hydrogel modulus regulates the activation of mechano‐sensitive signaling mediators and subsequent stem cell differentiation. Therefore, this magneto‐responsive hydrogel system provides a platform to investigate various cellular behaviors under dynamic mechanical microenvironments.