We propose a cell encapsulation matrix for use with a cytocompatible phospholipid polymer hydrogel system for control of cell functions in three-dimensional (3D) cell engineering and for construction of well-organized tissue in vivo. In cell engineering fields, it is important to produce cells with highly cell-specific functions. To realize this, we consider that new devices are needed for cell culture. So, we have designed soft biodevices using a spontaneously forming and cytocompatible polymer hydrogel system. A water-soluble phospholipid polymer bearing a phenylboronic acid unit, poly(2-methacryloyloxyethyl phosphorylcholine-co-n-butyl methacrylate-co-p- vinylphenylboronic acid) (PMBV), was prepared. This polymer, in aqueous solution, spontaneously converted to a hydrogel by addition of poly(vinyl alcohol) (PVA) aqueous solution due to reversible bonding between the boronate groups in PMBV and the hydroxyl groups in PVA. The PMBV/PVA hydrogel was dissociated by an exchange reaction with low molecular weight diol compounds such as d-fructose, which have high binding affinity to the phenylboronic acid unit. Cells were encapsulated easily in the PMBV/PVA hydrogel, and the cells in the hydrogel kept their original morphology and slightly proliferated during the preservation period. After dissociation of the hydrogel, the cells could be recovered as a cell suspension and cultured under conventional cell culture conditions as usual. Embryonic stem cells could be encapsulated without any adverse effects from the polymer hydrogel, i.e., the cells maintained their undifferentiated character during preservation in the PMBV/PVA hydrogel. Cell preservation and activity in the hydrogel were also investigated using microfluidic chips. The results clearly indicated that the PMBV/PVA hydrogels provide a useful platform for 3D encapsulation of cell culture systems without any reduction of their bioactivity.