Stem cell-related therapeutic technologies have garnered significant attention of the research community for their multi-faceted applications. To promote the therapeutic effects of stem cells, the strategies for cell microencapsulation in hydrogel microparticles have been widely explored, as the hydrogel microparticles have the potential to facilitate oxygen diffusion and nutrient transport alongside their ability to promote crucial cell-cell and cell-matrix interactions. Despite their significant promise, there is an acute shortage of automated, standardized, and reproducible platforms to further stem cell-related research. Microfluidics offers an intriguing platform to produce stem cell-laden hydrogel microparticles (SCHMs) owing to its ability to manipulate the fluids at the micrometer scale as well as precisely control the structure and composition of microparticles. In this review, the typical biomaterials and crosslinking methods for microfluidic encapsulation of stem cells as well as the progress in droplet-based microfluidics for the fabrication of SCHMs are outlined. Moreover, the important biomedical applications of SCHMs are highlighted, including regenerative medicine, tissue engineering, scale-up production of stem cells, and microenvironmental simulation for fundamental cell studies. Overall, microfluidics holds tremendous potential for enabling the production of diverse hydrogel microparticles and is worthy for various stem cell-related biomedical applications.