Biological tissues are complex structures with spatially distinct cellular compositions, architecture, and biochemical and mechanical properties. Therefore, it is imperative that biomaterial scaffolds which serve as frameworks for engineering tissue structures contain spatially-varying cues to differentiate encapsulated progenitor cells into distinct, spatially-organized phenotypes. Human articular cartilage consists of three spatially distinct zones: superficial, transitional, and middle, which have unique extracellular matrix (ECM) compositions, chondrocyte phenotypes, and mechanical properties. To identify material compositions that can differentiate human bone marrow stromal cells (hBMSCs) into these zone-specific cells, we studied nine different composite hydrogel materials under normoxic and hypoxic conditions, and determined their collagen composition, sulfated glycosoaminoglycan (sGAG) levels, and mechanical properties. A combined collagen-sGAG index was used to identify three material compositions that yielded superficial, transitional, and middle zone-like cells. These materials were then used to generate a composite tri-layer scaffold and hBMSC differentiation into spatially-varying cartilage-like tissue was evaluated. Our results show that material composition alone can be used to direct hBMSCs into distinct, zone-specific cell phenotypes and that spatially-varying, multi-layered material scaffolds can generate complex, patterned tissue structures.