In this paper a novel stimuli responsive hydrogel material, methacrylated sodium alginate beta-cyclodextrin (Alg-MA-β-CD), was used in combination with a microfluidic device to create microspheres. Currently there is no reliable method for fabricating homogeneous stimuli-responsive microspheres, in-house microfluidic devices are not reliable in manufacture quality or long-term use. Alginate hydrogels have many attractive characteristics for bioengineering applications and are commonly used to mimic the features and properties of the extracellular matrix (ECM). Human mesenchymal stem cells (hMSCs) are of top interest to tissue engineers. hMSCs are widely available and can be harvested and cultured directly out of human bone marrow. hMSCs have the ability to differentiate into osteoblasts, adipocytes, chondrocytes, muscle cells, and stromal fibroblasts depending on mechanical signals transmitted through surrounding ECM. The biomechanical properties of alginate based stimuli-responsive hydrogels can be tuned to match those of different types of tissues. When trying to transport and control the differentiation of hMSCs into generating new tissues or regenerating damaged tissues, it is highly beneficial to encapsulate the cells inside a microsphere made from these hydrogels. The proposed research objectives are: 1) To optimize fabrication techniques and create functional microfluidic devices; 2) Analyze the effects of flow parameters on microsphere production; and 3) Encapsulate viable hMSCs inside multi-stimuli responsive alginate microspheres using the fabricated microfluidic devices (MFDs). In this study, photolithography microfabrication methods were used to create flow-focusing style MFDs. The hydrogel materials were characterized via rheological methods. Syringe pumps controlled flow rates of fluids through the devices. Active droplets formation was monitored through a camera attached to an inverted microscope, where images were analyzed. Microsphere production was analyzed optically and characterized. Alg-MA-β-CD polymer solutions containing hMSCs were encapsulated, and a live/dead florescence assay was preformed to verify cell viability. Using a modified fabrication process it was possible to manufacture Alg-MA-β-CD microspheres and encapsulate and maintain viable hMSCs inside.