Mesenchymal stem cells (MSCs)-based therapy is a promising approach in regenerative medicine and tissue engineering. However, the outcomes of existing treatments have not been satisfactory owing to suboptimal localization to implantation site, poor viability, low engraftment efficacy and lack of functional remodeling of the delivered cells. Therefore, adopting an effective cell delivery modality is among the biggest technological challenges for successful clinical applications of MSC-based therapy. We developed a novel microencapsulation technique producing self-assembled collagen-MSC microspheres and demonstrated that these microspheres could serve as excellent cell delivery devices as they were stable, injectable and able to provide a protective, growth- and migration-supporting matrix to MSCs. We also showed that MSCs could preserve their stem cell nature upon microencapsulation and easily be localized with retained viability upon in vivo implantation. These microspheres present novel cell delivery devices with optimal biological and functional profile that may facilitate clinical applications of MSC-based therapy.