In this study, we demonstrate the applicability of functionalized alginate to serve as a platform for the covalent cross-linking or immobilization of complementary phosphine functionalized groups via the chemoselective Staudinger ligation scheme. Azide groups were covalently linked to alginate through a heterobifunctional polyethylene glycol (PEG) linker and carbodiimide. Degree of azide functionalization was varied as a function of carbodiimide concentration and determined by proton nuclear magnetic resonance (H-1 NMR) and infrared spectroscopy. Spontaneous and covalently cross-linked alginate-PEG gels were generated via the Staudinger ligation scheme upon incubation of the azide functionalized alginate with PEG chains having 1-methyl-2-diphenylphosphinoterephthalate (MDT) as end groups. Modulation of the MDT to N-3 ratio resulted in variability of gel characteristics. In addition, azide functionalized alginate retained its capacity to instantaneously form hydrogels via electrostatic interaction with multivalent cations such as Ca2+ and Ba2+. Subsequently, covalent linkage of phosphine functionalized agents postgelation of the alginate was feasible, as illustrated via linkage of MDT-PEG-carboxyfluorescein. Capitalization of the chemoselective and cell compatible Staudinger ligation scheme for covalent cross-linking of alginate hydrogels may enhance the utility of this polymer for the stable encapsulation of various cell types, in addition to their use in the immobilization of labeling agents, proteins, and other bioactive molecules.