We report a simple approach to fabricate custom-shape microcapsules using hydrogel templates synthesized by stop flow lithography. Cargo-containing microcapsules were made by coating hydrogel particles with a single layer of poly-L-lysine followed by a one-step core degradation and capsule cross-linking procedure. We determined appropriate coating conditions by investigating the effect of pH, ionic strength, and prepolymer composition on the diffusion of polyelectrolytes into the oppositely charged hydrogel template. We also characterized the degradation of the templating core by tracking the diffusivity of nanoparticles embedded within the hydrogel. Unlike any other technique, this approach allows for easy fabrication of microcapsules with internal features (e.g., toroids) and selective surface modification of Janus particles using any polyelectrolyte. These soft, flexible capsules may be useful for therapeutic applications as well as fundamental studies of membrane mechanics.