The progress of medical therapies, which rely on the transplantation of microencapsulated living cells, depends on the quality of the encapsulating material. Such material has to be biocompatible, and the microencapsulation process must be simple and not harm the cells. Alginate-poly(ethylene glycol) hybrid microspheres (alg-PEG-M) were produced by combining ionotropic gelation of sodium alginate (Na-alg) using calcium ions with covalent crosslinking of vinyl sulfone-terminated multi-arm poly(ethylene glycol) (PEG-VS). In a one-step microsphere formation process, fast ionotropic gelation yields spherical calcium alginate gel beads, which serve as a matrix for simultaneously but slowly occurring covalent cross-linking of the PEG-VS molecules. The feasibility of cell microencapsulation was studied using primary human foreskin fibroblasts (EDX cells) as a model. The use of cell culture media as polymer solvent, gelation bath, and storage medium did not negatively affect the alg-PEG-M properties. Microencapsulated EDX cells maintained their viability and proliferated. This study demonstrates the feasibility of primary cell microencapsulation within the novel microsphere type alg-PEG-M, serves as reference for future therapy development, and confirms the suitability of EDX cells as control model.