Tumor spheroids have been considered valuable miniaturized three dimensional (3D) tissue models for fundamental biological investigation as well as drug screening applications. Most tumor spheroids are generated utilizing the inherent aggregate behavior of tumor cells, and the effect of microenvironmental factors such as extracellular matrix (ECM) on tumor spheroid formation has not been extensively elucidated to date. Herein, uniform-sized spherical microgels encapsulated with different subtypes of breast tumor cells, based on tumor aggressiveness, are developed by flow-focusing microfluidics technology. Mechanical properties of microgels are controlled in a wide range via polymer concentration, and their influence on tumor physiology and spheroid formation is shown to be highly dependent on cell subtype. Specifically, the formation of polyploid/multinucleated giant cancer cells is a key early step in determining initial proliferation and eventual tumor spheroid generation within microgels with varying mechanics. In addition, chemotherapeutic screening performed on these tumor spheroids in microgels also display significantly variable cytotoxic effects based on microgel mechanics for each cell subtype, further highlighting the importance of microenvironmental factors on tumor spheroid physiology.