Efficient transport of stem/progenitor cells without affecting their survival and function is a key factor in any practical cell-based therapy. However, the current approach using liquid nitrogen for the transfer of stem cells requires a short delivery time window, is technically challenging and financially expensive. The present study aims to use semi-permeable alginate hydrogels (cross-linked by strontium) to encapsulate, store and release stem cells, in order to replace the conventional cryo-preservation method for the transport of therapeutic cells within world-wide distribution time-frame. Human mesenchymal stem cell (hMSC) and mouse embryonic stem cells (mESC) were successfully stored inside alginate hydrogels for 5 days under ambient conditions in an air-tight environment (sealed cryo-vial). Cell viability, of the cells extracted from alginate gel, gave 74% (mESC) and 80% (hMSC) survival rates, which compared favorably to cryo-preservation. More importantly, the subsequent proliferation rate and detection of common stem cell markers (both in mRNA and protein level) from hMSC and mESC retrieved from alginate hydrogels was also comparable to (if not better than) results gained following cryo-preservation. In conclusion, this new and simple application of alginate hydrogel encapsulation, may offer a cheap and robust alternative to cryo-preservation for the transport and storage of stem cells for both clinical and research purposes.