Human engineered heart tissues have potential to revolutionize cardiac development research, drug-testing, and treatment of heart disease; however, implementation is limited by the need to use pre-differentiated cardiomyocytes (CMs). Here we show that by providing a 3D poly(ethylene glycol)-fibrinogen hydrogel microenvironment, we can directly differentiate human pluripotent stem cells (hPSCs) into contracting heart tissues. Our straight-forward, ontomimetic approach, imitating the process of development, requires only a single cell-handling step, provides reproducible results for a range of tested geometries and size scales, and overcomes inherent limitations in cell maintenance and maturation, while achieving high yields of CMs with developmentally appropriate temporal changes in gene expression. Here we demonstrate that hPSCs encapsulated within this biomimetic 3D hydrogel microenvironment develop into functional cardiac tissues composed of self-aligned CMs with evidence of ultrastructural maturation, mimicking heart development, and enabling investigation of disease mechanisms and screening of compounds on developing human heart tissue.