The stiffness of the extracellular matrix (ECM) plays an important role in controlling cell functions. As an alternative to the ECM, hydrogels of tunable elasticity are widely used for in vitro cell mechanobiology studies. Therefore, characterizing the Young's modulus of the hydrogel substrate is crucial. In this paper, we propose a confocal microscopy indentation method for measuring the elasticity of polyacrylamide gel as a model hydrogel. Our new indentation method is based on three-dimensional imaging of the indented gel using confocal microscopy and automated image processing to measure indentation depth from the three-dimensional image stack. We tested and validated our method by indenting polyacrylamide gels of different rigidities with various sphere indentors and by comparing it with the rheometric method. Our measurements show consistent results regardless of the type of the indentors and agree with rheometric measurements. Therefore, the proposed confocal microscopy indentation method can accurately measure the stiffness of hydrogels.