In tissues, cells reside in confining microenvironments, which may mechanically restrict the ability of a cell to double in size as it prepares to divide. How confinement affects cell cycle progression remains unclear. We show that cells progressed through the cell cycle and proliferated when cultured in hydrogels exhibiting fast stress relaxation but were mostly arrested in the G0/G1 phase of the cell cycle when cultured in hydrogels that exhibit slow stress relaxation. In fast-relaxing gels, activity of stretch-activated channels (SACs), including TRPV4, promotes activation of the phosphatidylinositol 3-kinase (PI3K)/Akt pathway, which in turn drives cytoplasmic localization of the cell cycle inhibitor p27Kip1, thereby allowing S phase entry and proliferation. Cell growth during G1 activated the TRPV4-PI3K/Akt-p27Kip1 signaling axis, but growth is inhibited in the confining slow-relaxing hydrogels. Thus, in confining microenvironments, cells sense when growth is sufficient for division to proceed through a growth-responsive signaling axis mediated by SACs.