In nature, the environment surrounding biomolecules and living cells can dictate their structure, function, and properties. Confinement is a key means to define and regulate such environments. For example, the confinement of appropriate constituents in compartments facilitates the assembly, dynamics, and function of biochemical machineries as well as subcellular organelles. Membraneless organelles, in particular, are thought to form via thermodynamic cues defined within the interior space of cells. On larger length scales, the confinement of living cells dictates cellular function for both mammalian and bacterial cells. One promising class of artificial structures that can recapitulate these multiscale confinement effects is based on aqueous two-phase systems (ATPSs). This feature article highlights recent developments in the production and stabilization of ATPS-droplet-based systems, with a focus on interfacial complexation. These systems enable structure formation, modulation, and triggered (dis)assembly, thereby allowing structures to be tailored to fit the desired function and designed for particular confinement studies. Open issues for both synthetic cells and niche studies are identified.