Cancer cells cultured in physiologically relevant, three-dimensional (3D) matrices can recapture many essential features of native tumor tissues. In this study, a hyaluronic acid (HA)-based bilayer hydrogel system that not only supports the tumoroid formation from LNCaP prostate cancer (PCa) cells, but also simulates their reciprocal interactions with the tumor-associated stroma was developed and characterized. HA hydrogels were prepared by mixing solutions of HA precursors functionalized with acrylate groups (HA-AC) and reactive thiols (HA-SH) under physiological conditions. The resultant viscoelastic gels have an average elastic modulus of 234 ± 30 Pa and can be degraded readily by hyaluronidase. The orthogonal and cytocompatible nature of the crosslinking chemistry permits facile incorporation of cytokine-releasing particles and PCa cells. In our bilayer hydrogel construct, the top layer contains heparin (HP)-decorated, HA-based hydrogel particles (HGPs) capable of releasing heparin-binding epidermal growth factor-like growth factor (HB-EGF) in a sustained manner at a rate of 2.5 wt%/day cumulatively. LNCaP cells embedded in the bottom layer receive the growth factor signals from the top, and in response form enlarging tumoroids with an average diameter of 85 μm by day 7. Cells in 3D hydrogels assemble into spherical tumoroids, form close cellular contacts through E-cadherin, and show cortical organization of F-actin, whereas those plated as 2D monolayers adopt a spread-out morphology. Compared to cells cultured on 2D, the engineered tumoroids significantly increased the expression of two pro-angiogenic factors, vascular endothelial growth factor-165 (VEGF(165)) and interleukin-8 (IL-8), both at mRNA and protein levels. Overall, the HA model system provides a useful platform for the study of tumor cell responses to growth factors and for screening of anticancer drugs targeting these pathways.