Cancer cells and their associated tumors have long been considered to exhibit unregulated proliferation or growth. However, a substantial body of evidence indicates that tumor growth is subject to both positive and negative regulatory controls. Here, we describe a novel property of tumor growth regulation that is neither species nor tumor-type specific. This property, functionally a type of feedback control, is triggered by the encapsulation of neoplastic cells in a growth-restricting hydrogel composed of an agarose matrix with a second coating of agarose to form 6- to 8-mm diameter macrobeads. In a mouse cell model of renal adenocarcinoma (RENCA cells), this process resulted in selection for a stem cell-like subpopulation which together with at least one other cell subpopulation drove colony formation in the macrobeads. Cells in these colonies produced diffusible substances that markedly inhibited in vitro and in vivo proliferation of epithelial-derived tumor cells outside the macrobeads. RENCA cells in monolayer culture that were exposed to RENCA macrobead-conditioned media exhibited cell-cycle accumulation in S phase due to activation of a G(2)/M checkpoint. At least 10 proteins with known tumor suppression functions were identified by analysis of RENCA macrobead-conditioned media, the properties of which offer opportunities to further dissect the molecular basis for tumor growth control. More generally, macrobead culture may permit the isolation of cancer stem cells and other cells of the stem cell niche, perhaps providing strategies to define more effective biologically based clinical approaches to treat neoplastic disease.