Microencapsulation of plant-beneficial bacteria for use as biopesticides is a growing area of interest in the search for alternatives to harmful chemical pesticides. In this study, we assessed the microencapsulation of the Gram-negative, non-spore-forming plant-beneficial bacterial strain Collimonas arenae Cal35 in novel cross-linked alginate microcapsules (CLAMs) formed by spray-drying, and in novel cross-linked alginate matrix shell (CLAMshell) particles formed by fluidized bed spray-coating. Survival of Cal35 was 10-fold greater in CLAMs than in CLAMshells. During individual stress tests, Cal35 was found to be more tolerant to high temperatures than to desiccation. This is consistent with the greater survival of Cal35 when encapsulated by spray-drying, which is a process that uses high inlet temperature and short exposure times to dry conditions. The particle diameter of CLAMs ranged from 5 to 20 μm, indicating potential for spray applications. CLAMshell particle diameters were between 250 and 300 μm, suggesting potential for seed coatings.