Brain extracellular matrix (ECM) is complex, heterogeneous and often poorly replicated in traditional 2D cell culture systems. The development of more physiologically relevant 3D cell models capable of emulating the native ECM is of paramount importance for the study of human induced pluripotent stem cell (iPSC)-derived neurons. Due to its structural similarity with hyaluronic acid, a primary component of brain ECM, alginate is a potential biomaterial for 3D cell culture systems. However, a lack of cell adhesion motifs within the chemical structure of alginate has limited its application in neural culture systems. This study presents a simple and accessible method of incorporating collagen fibrils into an alginate hydrogel by physical mixing and controlled gelation under physiological conditions and tests the hypothesis that such a substrate could influence the behaviour of human neurons in 3D culture. Regulation of the gelation process enabled the penetration of collagen fibrils throughout the hydrogel structure as demonstrated by transmission electron microscopy. Encapsulated human iPSC-derived neurons adhered to the blended hydrogel as evidenced by the increased expression of α1, α2 and β1 integrins. Furthermore, immunofluorescence microscopy revealed that encapsulated neurons formed complex neural networks and matured into branched neurons expressing synaptophysin, a key protein involved in neurotransmission, along the neurites. Mechanical tuning of the hydrogel stiffness by modulation of the alginate ionic crosslinker concentration also influenced neuron-specific gene expression. In conclusion, we have shown that by tuning the physicochemical properties of the alginate/collagen blend it is possible to create different ECM-like microenvironments where complex mechanisms underpinning the growth and development of human neurons can be simulated and systematically investigated.