Direct injection of bone marrow derived mesenchymal stem cells (bm-MSCs) into injured tissues frequently leads to low cell viability and retention rates. Improved control of the cellular microenvironment and protection during injection through encapsulation of MSCs within injectable poly(ethylene glycol) fibrinogen (PF) microspheres may improve cell survival. This study described equine bm-MSC outgrowth and characteristics after encapsulation within PF microspheres and evaluated viability following injection through a needle. The hypotheses were that cell surface marker expression, viability, and tri-lineage differentiation would be the same before and after encapsulation and that viability would be maintained following shear. Equine bm-MSCs from 3 horses were characterized through morphological appearance in 2D culture, tri-lineage differentiation, and cell surface marker expression (CD44, MHC I, MHC II, CD11/CD18). Cells at passage 2-4 were encapsulated within PF microspheres using a custom-built microfluidic device. Cells that grew out of the microspheres were subcultured for characterization. Characterization tests were repeated on outgrowth cells and compared to non-encapsulated controls. Viability following shear through 18 and 20 gauge needles was evaluated by XTT assay. PF microspheres were highly uniform in shape and size with an average cell viability of 81.7%. There was no significant difference in cell viability between microspheres sheared through needles compared to control microspheres. Phenotypic appearance, cell surface marker expression, and the ability to undergo tri-lineage differentiation was unchanged between non-encapsulated controls and outgrowth cells. Encapsulation of bm-MSCs within PF microspheres may improve cell retention and survival during treatment of musculoskeletal injuries in horses.