For stem cell differentiation, the microenvironment can play an important role, and hydrogels can provide a three‐dimensional microenvironment to allow native cell growth in vitro. A challenge is that the stem cell's differentiation can be influenced by the matrix stiffness. We demonstrate a low‐toxicity method to create different stiffness matrices, by using a photopolymerizable gelatin methacrylate (GelMA) hydrogel cross‐linked by blue light (440 nm). The stiffness and porosity of GelMA hydrogel is easily modified by altering its concentration. We used human bone marrow mesenchymal stem cells (MSCs) as a cell source and cultured the GelMA‐encapsulated cells with EGM‐2 medium to induce endothelial differentiation. In our GelMA blue light hydrogel system, we found that MSCs can be differentiated into both endothelial‐like and osteogenic‐like cells. The mRNA expressions of endothelial cell markers CD31, von Willebrand factor, vascular endothelial growth factor receptor‐2, and CD34 were significantly increased in softer GelMA hydrogels (7.5% and 10%) compared with stiffer matrices (15% GelMA). On the other hand, the enhancements of osteogenic markers mRNA expressions (Alkaline phosphatase (ALP), Runx2, osteocalcin, and osteopontin) were highest in 10% GelMA. We also found that 10% GelMA hydrogel offered optimal conditions for MSCs to form capillary‐like structures. These results suggest that the mechanical properties of the GelMA hydrogel can influence both endothelial and osteogenic differentiation of MSCs and sequent capillary‐like formation.