2D in vitro studies have demonstrated that Schwann cells prefer scaffolds with mechanical modulus approximately 10× higher than the modulus preferred by nerves, limiting the ability of many scaffolds to promote both neuron extension and Schwann cell proliferation. Therefore, the goals of this work are to develop and characterize microgel-based scaffolds that are tuned over the stiffness range relevant to neural tissue engineering and investigate Schwann cell morphology, viability, and proliferation within 3D scaffolds. Using thiol-ene reaction, microgels with surface thiols are produced and crosslinked into hydrogels using a multiarm vinylsulfone (VS). By varying the concentration of VS, scaffold stiffness ranges from 0.13 to 0.76 kPa. Cell morphology in all groups demonstrates that cells are able to spread and interact with the scaffold through day 5. Although the viability in all groups is high, proliferation of Schwann cells within the scaffold of G* = 0.53 kPa is significantly higher than other groups. This result is ≈ 5× lower than previously reported optimal stiffnesses on 2D surfaces, demonstrating the need for correlation of 3D cell response to mechanical modulus. As proliferation is the first step in Schwann cell integration into peripheral nerve conduits, these scaffolds demonstrate that the stiffness is a critical parameter to optimizing the regenerative process.