A biocompatible emulsification method has been developed for microencapsulation of live cells and enzymes within a calcium alginate matrix. Fabrication of alginate beads was achieved by premixing a sequestering agent (sodium polyphosphate) and the calcium source (calcium sulphate) with the hydrogel monomer prior to the introduction to the oil phase. The competition between the sequesterant and sodium alginate in binding the available calcium ions results in a slowing down of the rate of polymerization and thereby lead to a successful calcium alginate bead formation. The mean diameter of the fabricated beads may be easily controlled by employing soy bean lecithin as an emulsifier. The polymerization time in this process may vary between 3 and 35 min depending on the ratio of sequesterant to that of calcium source at constant sodium alginate concentration. This preparation method avoids the use of pH extremes at all times and therefore is particularly suitable for encapsulating pH-sensitive cells and enzymes.