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Biologic therapies have revolutionized treatment options for rheumatoid arthritis (RA) but their continuous administration at high doses may lead to adverse events. Thus, the development of improved drug delivery systems that can sense and respond commensurately to disease flares represents an unmet medical need. Toward this end, we generated induced pluripotent stem cells (iPSCs) that express interleukin-1 receptor antagonist (IL-1Ra, an inhibitor of IL-1) in a feedback-controlled manner driven by the macrophage chemoattractant protein-1 (Ccl2) promoter. Cells were seeded in agarose hydrogel constructs made from 3D printed molds that can be injected subcutaneously via a blunt needle, thus simplifying implantation of the constructs, and the translational potential. We demonstrated that the subcutaneously injected agarose hydrogels containing genome-edited Ccl2-IL1Ra iPSCs showed significant therapeutic efficacy in the K/BxN model of inflammatory arthritis, with nearly complete abolishment of disease severity in the front paws. These implants also exhibited improved implant longevity as compared to the previous studies using 3D woven scaffolds, which require surgical implantation. This minimally invasive cell-based drug delivery strategy may be adapted for the treatment of other autoimmune or chronic diseases, potentially accelerating translation to the clinic.