Here, we present a mechano-responsive hydrogel system that utilizes vesicles, spherical enclosed membrane structures, as signal transducers capable of converting mechanical signals into chemical/biological signals that control the hydrogel network behavior. When the hydrogel is subjected to compressive stress, the vesicles embedded in the hydrogel release encapsulated compounds that subsequently regulate the hydrogel's properties. As a demonstration, we embedded vesicles loaded with ethylene glycol tetraacetic acid (EGTA), a calcium chelator, into a calcium-crosslinked alginate hydrogel. In response to compressive stress applied to the hydrogel, the incorporated vesicles release EGTA. As EGTA sequesters calcium ions from the calcium-crosslinked alginate hydrogel, it results in the degradation of the hydrogel. To the best of our knowledge, this is the first report of an on-demand hydrogel degradation strategy that directly responds to mechanical stress. This generalizable platform of incorporating vesicles can be easily applied to different types of hydrogels to introduce mechano-responsiveness without the need to modify their chemical structures. Hydrogels can be designed to respond and change in specific manners depending on the type of network-tuning compounds loaded in vesicles. This study provides valuable insights into the design of stimuli-responsive hydrogels that will benefit a wide range of biomedical applications, including tissue regeneration.