Hydrogels are an important class of biomaterials, but are inherently weak; to overcome this challenge, we report an in situ manufacturing technique to fabricate mechanically robust, fiber-reinforced poly(ethylene oxide) (PEO) hydrogels. Here, a covalent PEO cross-linking scheme was implemented to derive poly(e-caprolactone) (PCL) fiber reinforced PEO hydrogels from multilayer coextruded PEO/PCL matrix/fiber composites. By varying PCL fiber loading between similar to 0.1 vol % and similar to 7.8 vol %, hydrogel stiffness was tailored from 0.69 +/- 0.04 MPa to 1.94 +/- 0.21 MPa. The influence of PCL chain orientation and enhanced mechanics via uniaxial drawing of PCL/PEO composites revealed a further 225% increase in hydrogel stiffness. To further highlight the robust nature of this manufacturing process, we also derived rigid poly(L-lactic acid) (PLLA) fiber-reinforced PEO hydrogels with a stiffness of 8.71 +/- 0.21 MPa. Fibroblast cells were injected into the hydrogel volume, which displayed excellent ingrowth, adhesion, and proliferation throughout the fiber reinforced hydrogels. Finally, the range of mechanical properties obtained with fiber-reinforced hydrogels directed differentiation pathways of MC3T3-E1 cells into osteoblasts. This innovative manufacturing approach to achieve randomly aligned, well-distributed, micrometer-scale fibers within a hydrogel matrix with tunable mechanical properties represents a significant avenue of pursuit not only for load-bearing hydrogel applications, but also targeted cellular differentiation.