Cell-laden micrometer-sized hydrogels (microgels) hold great promise for improving high throughput ex- vivo drug screening and engineering biomimetic tissues. Microfluidics is a powerful tool to produce microgels. However, only a limited amount of biomaterials have been reported to be compatible with on-chip microgel formation. Moreover, these biomaterials are often associated with mechanical instability, cytotoxicity, and cellular senescence. To resolve this challenge, dextran-tyramine has been explored as a novel biomaterial for on-chip microgel formation. In particular, dextran-tyramine is compared with two commonly used biomaterials, namely, polyethylene-glycol diacrylate (PEGDA) and alginate, which crosslink through enzymatic reaction, UV polymerization, and ionic interaction, respectively. Human mesenchymal stem cells (hMSCs) encapsulated in dextran-tyramine microgels demonstrate significantly higher (95%) survival as compared to alginate (81%) and PEGDA (69%). Long-term cell cultures demonstrate that hMSCs in PEGDA microgels become senescent after 7 d. Alginate microgels dissolve within 7 d due to Ca2+ loss. In contrast, dextran-tyramine based microgels remain stable, sustain hMSCs metabolic activity, and permit for single-cell level analysis for at least 28 d of culture. In conclusion, enzymatically crosslinking dextran-tyramine conjugates represent a novel biomaterial class for the on-chip production of cell-laden microgels, which possesses unique advantages as compared to the commonly used UV and ionic crosslinking biomaterials.