An increasing demand to regenerate tissues from patient-derived sources has led to the development of cell-based therapies using autologous stem cells, thereby decreasing immune rejection of scaffolds coupled with allogeneic stem cells or allografts. Adult stem cells are multipotent and are readily available in tissues such as fat and bone marrow. They possess the ability to repair and regenerate tissue through the production of therapeutic factors, particularly vasculogenic proteins. A major challenge in cell-based therapies is localizing the delivered stem cells to the target site. Microencapsulation of cells provides a porous polymeric matrix that can provide a protected environment, localize the cells to one area, and maintain their viability by enabling the exchange of nutrients and waste products between the encapsulated cells and the surrounding tissue. In this chapter, we describe a method to produce injectable microbeads containing a tunable number of stem cells using the biopolymer alginate. The microencapsulation process involves extrusion of the alginate suspension containing cells from a microencapsulator, a syringe pump to control its flow rate, an electrostatic potential to overcome capillary forces and a reduced Ca ++ cross-linking solution containing a nutrient osmolyte, to form microbeads. This method allows the encapsulated cells to remain viable up to three weeks in culture and up to three months in vivo and secrete growth factors capable of supporting tissue regeneration.