Mechanotransduction is the fundamental process by which cells detect and respond to their mechanical environment, and is critical for tissue homeostasis. Understanding mechanotransduction mechanisms will provide insights into disease processes and injuries, and may support novel tissue engineering research. Although there has been extensive research in mechanotransduction, many pathways remain unclear, due to the complexity of the signaling mechanisms and loading environments involved. This study describes the development of a novel hydrogel-based fiber composite material for investigating mechanotransduction in fibrous tissues. By encapsulating poly(2-hydroxyethyl methacrylate) rods in a bulk poly(ethylene glycol) matrix, it aims to create a micromechanical environment more representative of that seen in vivo. Results demonstrated that collagen-coated rods enable localized cell attachment, and cells are successfully cultured for one week within the composite. Mechanical analysis of the composite indicates that gross mechanical properties and local strain environments could be manipulated by altering the fabrication process. Allowing diffusion between the! rods and surrounding matrix creates an interpenetrating network whereby the relationships between shear and tension are altered. Increasing diffusion enhances the shear bond strength between rods and matrix and the levels of local tension along the rods. Preliminary investigation into fibroblast mechanotransduction illustrates that the fiber composite upregulates collagen I expression, the main protein in fibrous tissues, in response to cyclic tensile strains when compared to less complex 2D and 3D environments. In summary, the ability to create and manipulate a strain environment surrounding the fibers, where combined tensile and shear forces uniquely impact cell functions, is demonstrated.