3D bioprinting improves orientation of in vitro tumor models by offering layer by layer positioning of cancer cells and cancer associated fibroblasts (CAFs) which can replicate tumor microenvironment. Aim of this study was to develop a sodium alginate -gelatin (SA-GL) hydrogel by optimizing rheological parameters to print non-small cell lung cancer (NSCLC) patient derived xenograft (PDX) cells and lung CAFs co-cultures. SA-GL hydrogels were prepared, and rheological properties were evaluated. Both the cells were mixed with the hydrogel and printed using INKREDIBLE bioprinter. Hydrogels prepared with 3.25% and 3.5% (w/v) SA and 4% (w/v) GL showed higher printability and cell viability. A significant decline in viscosity with shear rate was observed in these hydrogels suggesting the shear thinning property of hydrogels. Spheroid size distribution after 15 days was in the diameter range of 50–1100 µm. Up-regulation of vimentin, α-SMA and loss of E-cadherin in co-culture spheroids confirmed cellular crosstalk. This study demonstrates that rheological optimization of SA-GL hydrogel enhances printability and viability of NSCLC PDX and CAF co-culture which allows 3D co-culture spheroid formation within the printed scaffold. Therefore, this model can be used for studying high throughput drug screening and other pre-clinical applications.