A method has been developed to produce stable cell-matrix microspheres with up to 100% encapsulation efficiency and high cell viability, using matrix or biomaterial systems with poor shape and mechanical stability for applications including cell therapeutics via microinjection or surgical implantation, 3D culture for in vitro expansion without repeated cell splitting using enzymatic digestion or mechanical dissociation and for enhanced production of therapeutic biomolecules, and in vitro modeling for morphogenesis studies. The modified droplet generation method is simple and scalable and enables the production of cell-matrix microspheres when the matrix or biomaterial system used has low concentration, with slow phase transition, with poor shape and mechanical stability.