Type 1 diabetes is chronic disease with numerous complications and currently no cure. Tissue engineering strategies have shown promise in providing a therapeutic solution, but maintenance of islet function and survival within these therapies represents a formidable challenge. The islet microenvironment may hold the key for proper islet maintenance. To elucidate the microenvironmental conditions necessary for improved islet function and survival, three-dimensional (3D) polyacrylamide cell scaffolds were fabricated with stiffnesses of 0.1 and 10 kPa to regulate the spatial and mechanical control of biosignals. Specifically, we show a significant increase in insulin mRNA expression of 3D primary mouse islet-derived and Min6-derived β-cell clusters grown on compliant 0.1 kPa scaffolds. Moreover, these compliant 0.1 kPa scaffolds also increase glucose sensitivity in Min6-derived β-cell clusters as demonstrated by the increased glucose stimulation index. Our data suggest that stiffness-specific insulin processing is regulated through the myosin light chain kinase (MLCK) and Rho-associated protein kinase (ROCK) mechanosensing pathways. Additionally, β-catenin is required for regulation of stiffness-dependent insulin expression. Through activation or inhibition of β-catenin signaling, reversible control of insulin expression is achieved on the compliant 0.1 kPa and overly stiff 10 kPa substrates. Understanding the role of the microenvironment on islet function can enhance the therapeutic approaches necessary to treat diabetes for improving insulin sensitivity and response.