The extracellular matrix provides structural and organizational cues for tissue development and defines and maintains cellular phenotype during cell fate determination. Multipotent mesenchymal stem cells use this matrix to tightly regulate the balance between their differentiation potential and self-renewal in the native niche. When understood, the mechanisms that govern cell-matrix crosstalk during differentiation will allow for efficient engineering of natural and synthetic matrices to specifically direct and maintain stem cell phenotype. This work identifies the discoidin domain receptor 1 (DDR1), a collagen activated receptor tyrosine kinase, as a potential link through which stem cells sense and respond to the 3D organization of their extracellular matrix microenvironment. DDR1 is dependent upon both the structure and proteolytic state of its collagen ligand and is specifically expressed and localized in three dimensional type I collagen culture. Inhibition of DDR1 expression results in decreased osteogenic potential, increased cell spreading, stress fiber formation and ERK1/2 phosphorylation. Additionally, loss of DDR1 activity alters the cell-mediated organization of the naïve type I collagen matrix. Taken together, these results demonstrate a role for DDR1 in the stem cell response to and interaction with three dimensional type I collagen. Dynamic changes in cell shape in 3D culture and the tuning of the local ECM microstructure, directs crosstalk between DDR1 and two dimensional mechanisms of osteogenesis that can alter their traditional roles.