This thesis describes a novel approach for cell encapsulation in alginate gel microbeads. The main aim of the thesis was to optimise a microfluidic setup and chip to encapsulate cells in monodisperse alginate gel microbeads. A number of cytotoxicity tests were therefore carried out to determine the effect of formulations used for the production, degradation and gelation of calcium alginate gel beads. Results from these tests revealed that the formulations used had little or no significant effect on cell growth, and therefore, alginate was deemed to be a suitable cell encapsulating material for further investigations.Alginate gel microbeads were produced using hydrodynamic focusing techniques. For this purpose two different microfluidic setups were constructed. Fluids (oil, acidified oil and samples) were driven through the microfluidic setup by gravity. However, a number of drawbacks using this setup arose, such as polydispersity and reproducibility. Syringe pumps were introduced into the design of the second microfluidic setup as a means of driving fluids through the setup. In addition three different microfluidic chips were fabricated with the aim of producing the ideal alginate gel microbead. The first microfluidic chip (PMMA MC1) was fabricated from PMMA and involved producing alginate gel microbeads that were internally gelified. This chip suffered from a number of drawbacks such as continuous blockages within the microfluidic channels, which led to the development of the second microfluidic chip. This chip was also fabricated from PMMA (PMMA MC2) but in contrast to PMMA MC1, gelification occurred externally, i.e. gelation took place off chip, and in this case the alginate microdroplets were dropped into a well containing 1 mL of acidified oil. This encapsulating procedure caused immediate cell death, which indicated that the internal gelation of alginate gel microbeads was favoured. These results also indicated that the design of the microfluidic chip needed developing in order to produce the ideal microbeads that can be used for cell encapsulation. This led to the fabrication of a novel microfluidic chip (PC MC3) which was fabricated from polycarbonate (PC) and involved internal gelation of the calcium alginate gel microbeads. The combination of using the optimised microfluidic setup and PC MC3, in addition to alternations in some of the solutions used to make the alginate microbeads, resulted in the production of the desired ideal gel microbeads containing cells. Snap shots of the encapsulated cells obtained using fluorescence microscopy after 24 hours of encapsulation, revealed that the cells showed some characteristics of living cells, yet at the same time they also showed some characteristics of dead cells. These findings demonstrate the potential use of the optimised microfluidic setup and PC MC3 chip for many biological and medical applications.