Static compressive stress can influence the matrix, which subsequently affects cell behaviour and the cell's ability to further transform the matrix. This study aimed to assess response to static compressive stress at different stages of osteoblast differentiation and assess the cell cytoskeleton's role as a conduit of matrix-derived stimuli. Mouse bone marrow mesenchymal stem cells (MSCs) (D1 ORL UVA), osteoblastic cells (MC3T3-E1) and post-osteoblast/pre-osteocyte-like cells (MLO-A5) were seeded in hydrated and compressed collagen gels. Contraction was quantified macroscopically, and cell morphology, survival, differentiation and mineralisation assessed using confocal microscopy, alamarBlue® assay, real-time quantitative reverse transcription polymerase chain reaction (RT-qPCR) and histological stains, respectively. Confocal microscopy demonstrated cell shape changes and favourable microfilament organisation with static compressive stress of the collagen matrix; furthermore, cell survival was greater compared to the hydrated gels. The stage of osteoblast differentiation determined the degree of matrix contraction, with MSCs demonstrating the greatest amount. Introduction of microfilament disrupting inhibitors confirmed that pre-stress and tensegrity forces were under the influence of gel density, and there was increased survival and differentiation of the cells within the compressed collagen compared to the hydrated collagen. There was also relative stiffening and differentiation with time of the compressed cell-seeded collagen, allowing for greater manipulation. In conclusion, the combined collagen chemistry and increased density of the microenvironment can promote upregulation of osteogenic genes and mineralisation; MSCs can facilitate matrix contraction to form an engineered membrane with the potential to serve as a 'pseudo-periosteum' in the regeneration of bone defects.