Modelling peri-implantation mammalian development using the self-organising properties of stem cells is a rapidly growing field that has advanced our understanding of cell fate decisions occurring in the early embryo. Matrigel, a basement membrane matrix, is a critical substrate used in various protocols for its efficacy in promoting stem cell growth and self-organisation. However, its role in driving stem cell lineage commitment, and whether this effect is driven by biochemical or physical cues, is not currently clear. Here, we grow embryoid bodies in suspension, Matrigel and agarose, an inert polysaccharide, to attempt to decouple the physical and biochemical roles of Matrigel and better understand how it drives stem cell differentiation. We use a combination of light microscopy, quantitative PCR and immunostaining to investigate gene and protein changes in our different culture conditions. We show that stem cell aggregates in Matrigel are hindered in their ability to elongate compared with those grown in agarose or in suspension, indicating that prohibitive role in self-organisation. Aggregates in Matrigel are also driven to differentiate into endoderm, with ectoderm differentiation inhibited. Furthermore, these effects are not due to the physical presence of Matrigel, as the same effects are not witnessed in aggregates grown in agarose. Our results thus indicate that Matrigel has a significant and complex effect on the differentiation and morphology of embryoid bodies.