Pluripotent stem cells hold great promise for many pharmaceutical and therapeutic applications. However, the lack of scalable methodologies to expand these cells to clinically relevant numbers is a major roadblock in realizing their full potential. To address this problem, we report here a scalable approach for the expansion of pluripotent stem cells within bioactive hydrogel capsules in stirred bioreactors. To achieve rapid crosslinking of cellular microenvironments with tuneable, cell-instructive functionality, we combined calcium-mediated alginate (CaAlg) complexation with crosslinking of poly-(ethylene glycol) (PEG) macromers via a Michael-type addition. The resulting hybrid networks have been shown to have very good handling properties and can be readily decorated with biologically active signals such as integrin ligands or Cadherin-based motifs to influence the fate of mouse induced pluripotent stem (iPS) cells. Air-driven co-axial extrusion was used to reproducibly generate gel microcapsules in high-throughput. Furthermore, the gel capsules can be enveloped in a poly(L-lysine) shell to control swelling or molecular permeability independently of the gel composition. iPS cells entrapped within such capsules expanded with limited commitment to the endodermal lineage. Functionalization of gels with an appropriate density of Arg-Gly-Asp (RGD) ligands further increased the iPS cell expansion rate and reduced the spontaneous differentiation. Therefore, the combination of micro-scale instruction of cell fate by an engineered microenvironment and macro-scale cell manipulation in bioreactors opens up exciting opportunities for stem cell-based applications.