Bone marrow (BM) organoids provide powerful tools to study the vital interplay between the BM microenvironment and resident cells. Current biomaterials, however, are limited in terms of versatility for independently studying the biochemical and biophysical properties that regulate BM function. Here, a transglutaminase (TG) crosslinked system that seamlessly incorporates poly(ethylene glycol) (PEG) and hyaluronic acid (HA) into hybrid hydrogels for the formation of BM analogues is presented. By combining features of PEG and HA, these novel biomaterials are tunable to optimize their physical and biological properties for BM organoid formation. Utility of the TG-PEG/HA hybrid hydrogels to maintain, expand, or differentiate human bone marrow-derived stromal cells and human hematopoietic stem and progenitor cells in vitro is demonstrated. Even more compelling, TG-PEG/HA hybrid hydrogels are superior to currently used natural biomaterials in forming humanized BM organoids in a xenograft model. Hybrid hydrogels in comparison to pure PEG or pure HA afford the ideal attributes of both regarding material handling, structural integrity, and minimizing macrophage infiltration in vivo. The engineered humanized BM organoids presented here may be effective tools for the study of this intricate organ.