This study reported the encapsulation of liver microsomes into a thermosensitive hydrogel to characterize drug metabolism and predict drug effects. Pluronic®F-127 (F127) and acrylamide-bisacrylamide (Acr-Bis) were utilized as the two precursors. After chemical crosslinking catalyzed by ammonium persulfate (APS) and N,N,N′,N′-tetramethylethylenediamine (TEMED), the resulting Pluronic F127-acrylamide-bisacrylamide (FAB) hydrogel could encapsulate microsomes at 4 °C and facilitate metabolic reactions at 37 °C. The gel morphology at different Acr-Bis concentrations was characterized using field emission scanning electron microscopy (FE-SEM). Higher concentrations of Acr-Bis could lead to higher degrees of cross-linking of the gel. A fluorescent staining assay was subsequently used to demonstrate successful encapsulation of microsomes into the gel as well as the free diffusion process of micromolecular substrates. The thermosensitivity of the FAB gel was studied using swelling ratio and protein release assay to verify its ability to encapsulate microsomes. The metabolic activity of microsomes encapsulated in gels was investigated by detecting the metabolites of FDA-approved substrates, including dextromethorphan, chlorzoxazone and testosterone. Compared with the traditional method of microsomal incubation, the FAB gel maintained 60%–70% of microsome activity. Lastly, the classic anticancer prodrug cyclophosphamide (CTX) was chosen as a model drug for the study of drug metabolism and the prediction of drug effects. When the microsomes encapsulated in the FAB gel were used in the cell culture system, CTX induced a higher level of apoptosis in MCF-7 cells compared with traditional microsomes.