<p>Patient specific induced pluripotent stem cells (iPSCs) derived β cells represent an effective means for disease modeling and autologous diabetes cell replacement therapy. In this study, an AG73-5%gelatin methacryloyl (GelMA) /2% alginate methacrylate (AlgMA) hydrogel was employed to generate pancreatic progenitor (PP) organoids and improve stem cell-derived β (SC-β) cell differentiation protocol. The laminin-derived homolog AG73, which mimics certain cell‒matrix interactions, facilitates AKT signaling pathway activation to promote PDX1⁺/NKX6.1⁺ PP organoid formation and effectively modulates subsequent epithelial–mesenchymal transition (EMT) in the endocrine lineage. The 5%GelMA/2%AlgMA hydrogel mimics the physiological stiffness of the pancreas, providing the optimal mechanical stress and spatial structure for PP organoid differentiation. The Syndecan-4 (SDC4)-ITGAV complex plays a pivotal role in the early stages of pancreatic development by facilitating the formation of SOX9⁺/PDX1⁺ bipotent PPs. Our findings demonstrate that AG73-GelMA/AlgMA hydrogel-derived SC-β cells exhibit enhanced insulin secretion and accelerated hyperglycemia reversal in vivo. This study presents a cost-effective, stable, and efficient alternative for the comprehensive 3D culture of SC-β cells in vitro by mitigating the uncertainties associated with conventional culture methods.</p>