Biomaterials that mimic aspects of the extracellular matrix by presenting a 3D microenvironment that cells can locally degrade and remodel are finding increased applications as wound-healing matrices, tissue engineering scaffolds, and even substrates for stem cell expansion. In vivo, cells do not simply reside in a static microenvironment, but instead, they dynamically reengineer their surroundings. For example, cells secrete proteases that degrade extracellular components, attach to the matrix through adhesive sites, and can exert traction forces on the local matrix, causing its spatial reorganization. Although biomaterials scaffolds provide initially well-defined microenvironments for 3D culture of cells, less is known about the changes that occur over time, especially local matrix remodeling that can play an integral role in directing cell behavior. Here, we use microrheology as a quantitative tool to characterize dynamic cellular remodeling of peptide-functionalized poly(ethylene glycol) (PEG) hydrogels that degrade in response to cell-secreted matrix metalloproteinases (MMPs). This technique allows measurement of spatial changes in material properties during migration of encapsulated cells and has a sensitivity that identifies regions where cells simply adhere to the matrix, as well as the extent of local cell remodeling of the material through MMP-mediated degradation. Collectively, these microrheological measurements provide insight into microscopic, cellular manipulation of the pericellular region that gives rise to macroscopic tracks created in scaffolds by migrating cells. This quantitative and predictable information should benefit the design of improved biomaterial scaffolds for medically relevant applications.PEG-peptide hydrogels | human mesenchymal stem cells | cell migration | microrheology