Decades of efforts in engineering in vitro cancer models have advanced drug discovery and the insight into cancer biology. However, the establishment of preclinical models that enable fully recapitulating the tumor microenvironment remains challenging owing to its intrinsic complexity. Recent progress in engineering techniques has allowed the development of a new generation of in vitro preclinical models that can recreate complex in vivo tumor microenvironments and accurately predict drug responses, including spheroids, organoids, and tumor-on-a-chip. These biomimetic 3D tumor models are of particular interest as they pave the way for better understanding of cancer biology and accelerating the development of new anticancer therapeutics with reducing animal use. Here, the recent advances in developing these in vitro platforms for cancer modeling and preclinical drug screening, focusing on incorporating hydrogels are reviewed to reconstitute physiologically relevant microenvironments. The combination of spheroids/organoids with microfluidic technologies is also highlighted to better mimic in vivo tumors and discuss the challenges and future directions in the clinical translation of such models for drug screening and personalized medicine.