Protein delivery is often used in tissue engineering applications to control differentiation processes, but is limited by protein instability and cost. An alternative approach is to control the cellular microenvironment through biomaterial-mediated sequestration of cell-secreted proteins important to differentiation. Thus, we utilized heparin-based microparticles to modulate cellular differentiation via protein sequestration in an in vitro model system of endochondral ossification. Heparin and poly(ethylene-glycol) (PEG; a low-binding material control)-based microparticles were incorporated into ATDC5 cell spheroids or incubated with ATDC5 cells in transwell culture. Reduced differentiation was observed in the heparin microparticle group as compared to PEG and no microparticle-containing groups. To determine if observed changes were due to sequestration of cell-secreted protein, the proteins sequestered by heparin microparticles were analyzed using SDS-PAGE and mass spectrometry. It was found that heparin microparticles bound insulin-like growth factor binding proteins (IGFBP)-3 and 5. When incubated with a small-molecule inhibitor of IGFBPs, NBI 31772, a similar delay in differentiation of ATDC5 cells was observed. These results indicate that heparin microparticles modulated chondrocytic differentiation in this system via sequestration of cell-secreted protein, a technique that could be beneficial in the future as a means to control cellular differentiation processes. Statement of Significance: In this work, we present a proof-of-principle set of experiments in which heparin-based microparticles are shown to modulate cellular differentiation through binding of cell-secreted protein. Unlike existing systems that rely on expensive protein with limited half-lives to elicit changes in cellular behavior, this technique focuses on temporal modulation of cell-generated proteins. This technique also provides a biomaterials-based method that can be used to further identify sequestered proteins of interest. Thus, this work indicates that glycosaminoglycan-based biomaterial approaches could be used as substitutes or additions to traditional methods for modulating and identifying the cell-secreted proteins involved in directing cellular behavior.