A cell’s fate is tightly controlled by its microenvironment. Key factors contributing to this microenvironment include physical contacts with the extracellular matrix and neighboring cells, in addition to soluble factors produced locally or distally. Alterations to these cues can drive homeostatic processes, such as tissue regeneration/wound healing, or may lead to pathologic tissue dysfunction. In vitro models of cell and tissue microenvironments are desirable for enhanced understanding of the biology and ultimately for improved treatment. However, mechanisms to exert specific control over cellular microenvironments remains a significant challenge. Genetic modification has been used but is limited to products that can be manufactured by cells and release kinetics of therapeutics cannot easily be controlled. Herein we describe a non-genetic approach to engineer cells with an intracellular depot of phenotype altering agent/s that can be used for altering cell fate via intracrine-, paracrine-, and endocrine-like mechanisms. Specifically, we show that human mesenchymal stem cells (MSCs) can be engineered with poly lactide-co-glycolic acid (PLGA) particles containing dexamethasone, which acts on cytoplasmic receptors. The controlled release properties of these particles allowed for sustained intracellular and extracellular delivery of agent to promote differentiation of particle carrying cells, as well as neighboring cells and distant cells that do not contain particles.