Over the last two decades, droplet‐based microfluidics has evolved into a versatile tool for fabricating tailored micrometer‐sized hydrogel particles. Combining precise fluid handling down to femtoliter scale with diverse hydrogel precursor design, it allows for excellent control over microgel size and shape, but also functionalization and crosslinking density. Consequently, it is possible to tune physicochemical and mechanical properties such as swelling, degradation, stimuli sensitivity, and elasticity by microfluidic droplet templates. This has led to a recent trend in applying microgels as experimental platform in cell culturing, drug delivery, sensing, and tissue engineering. This article highlights advances in microfluidic droplet formation as templates for microgels with tailored physicochemical properties. Special focus is put on evolving design strategies for the synthesis of mechanically defined microgels, their applications, and methods for mechanical characterization on single‐particle level. Microfluidic emulsion formation combined with hydrogel design via droplet templates has greatly advanced the application of microgels in cell culturing, sensing and actuation. On that account, exact knowledge and control over physicochemical and mechanical properties is crucial. We discuss recent progress in droplet microfluidics‐based design of mechanically defined microgels, their latest applications and characterization methods on single‐particle level.