Cell specification and tissue formation during embryonic development are precisely controlled by the local concentration and temporal presentation of morphogenic factors. Similarly, pluripotent embryonic stem cells can be induced to differentiate in vitro into specific phenotypes in response to morphogen treatment. Embryonic stem cells (ESCs) are commonly differentiated as 3D spheroids referred to as embryoid bodies (EBs); however, differentiation of cells within EBs is typically heterogeneous and disordered. In this study, we demonstrate that in contrast to soluble morphogen treatment, delivery of morphogenic factors directly within EB microenvironments in a spatiotemporally controlled manner using polymer microspheres yields homogeneous, synchronous and organized ESC differentiation. Degradable PLGA microspheres releasing retinoic acid were incorporated directly within EBs and induced the formation of cystic spheroids uniquely resembling the phenotype and structure of early streak mouse embryos (E6.75), with an exterior of FOXA2+ visceral endoderm enveloping an epiblast-like layer of OCT4+ cells. These results demonstrate that controlled morphogen presentation to stem cells using degradable microspheres more efficiently directs cell differentiation and tissue formation than simple soluble delivery methods and presents a unique route to study the spatiotemporal effects of morphogenic factors on embryonic developmental processes in vitro.