The production of hydrogel microspheres (MS) for cell immobilization, maintaining the favorable properties of alginate gels but presenting enhanced performance in terms of in vivo durability and physical properties, is desirable to extend the therapeutic potential of cell transplantation. A novel type of hydrogel MS was produced by straightforward functionalization of sodium alginate (Na-alg) with heterotelechelic poly(ethylene glycol) (PEG) derivatives equipped with either end thiol or 1,2-dithiolane moieties. Activation of the hydroxyl moieties of the alginate backbone in the form of imidazolide intermediate allowed for fast conjugation to PEG oligomers through a covalent carbamate linkage. Evaluation of the modified alginates for the preparation of MS combining fast ionic gelation ability of the alginate carboxylate groups and slow covalent cross-linking provided by the PEG-end functionalities highlighted the influence of the chemical composition of the PEG-grafting units on the physical characteristics of the MS. The mechanical properties of the MS (resistance and shape recovery) and durability of PEG-grafted alginates in physiological environment can be adjusted by varying the nature of the end functionalities and the length of the PEG chains. In vitro cell microencapsulation studies and preliminary in vivo assessment suggested the potential of these hydrogels for cell transplantation applications.