Microfluidic devices are increasingly used to perform biological experiments on a single-cell basis. However, long-term stability of cell positions is still an issue. A novel biocompatible method for cell entrapment and release on a microchip is presented. It is based on the controlled formation of an alginate hydrogel by bringing two laminar flows of alginate and calcium ions in the range of 2 mM to 40 mM into contact. The resulting growth of a gel bar is used to enclose and immobilize yeast cells. Adding ethylenediaminetetraacetic acid (EDTA) to the alginate solution allows for control of the hydrogel growth, and by varying the ratio of Ca²⁺ to EDTA concentrations gel growth or gel shrinkage can be induced at will. Trapped cells are released during shrinkage of the gel. The trapping efficiency for different cell speeds is investigated and the properties of gel growth are discussed using a diffusion model. Precise positioning of a single cell is demonstrated. The technique presented allows not only the reversible immobilization of cells under gentle conditions but also offers the potential of long-term cell cultures as shown by on-chip incubation of yeast cells. The procedure may provide a simple and fully biocompatible technique for a multitude of innovative experiments on cells in microsystems.