Collagen is prevalent in the microenvironment of many cancer types and has been demonstrated to play an important role during disease progression. We previously showed the importance of hypoxic gradients in sarcoma cell migration. Here, we utilized an oxygen gradient collagen gel platform to determine the impact of collagen fiber density and hypoxic gradient on sarcoma cell migration. The oxygen gradient was created by regulating the oxygen diffusion coefficient along with the cellular oxygen consumption rate. Collagen fiber density in the hydrogels is modified by changing the preincubation period of the collagen gel solution at 4 °C, controlling fiber density independently of collagen concentration and oxygen tension. High fiber density gels have wider and longer fibers but a similar microscale pore size with a larger nanoscale pore size and quicker stress relaxation time, compared to the low fiber density gel. Both gels have the same Young's modulus. We analyzed responses of sarcoma cells encapsulated in the different hydrogels for 3 days. In the nonhypoxic low fiber density constructs, sarcoma cells exhibit a larger aspect ratio, and the matrix has less fiber alignment compared to the nonhypoxic high fiber density constructs. Interestingly, we found a minimal effect of fiber density on cell migration and the ability of the cells to degrade the matrix in nonhypoxic constructs. When compared with hypoxic constructs, we observed the opposite trend, where cells in low fiber density constructs exhibit a lower aspect ratio and the matrix has more aligned fibers compared to hypoxic high fiber density constructs. Sarcoma cells encapsulated in high fiber density hypoxic gels migrated faster and degraded the matrix more rapidly compared to the low fiber density hypoxic constructs. Overall, we show that hypoxic cell migration and matrix degradation are enhanced in high fiber density gels, while hypoxic matrix alignment is prominent in low fiber density gels. Our results suggest that the differences in cellular responses under hypoxic gradients are due to the hydrogel architecture including fiber density, size (length and width), and stress relaxation.