Parkinson’s Disease (PD) is a neurodegenerative disorder primarily characterised by the death of dopaminergic neurons in the substantia nigra [1], which is related to different movement disorders [1], however currently there are only symptomatic therapies available and none of these address the specific pathophysiology of the disease [2]. Hydrogels have shown potential as a vehicle for delivery of stem cells into the brain protecting them from the host environment and increasing their viability [3]. Collagen has shown high compatibility with neural tissue [3] and is suitable for cell encapsulation. Additionally, the therapeutic potential of collagen can be further expanded by functionalising it to address a specific aspect of PD pathology. Therefore, the goal of this project is to develop and optimise a collagen-based hydrogel that will encapsulate embryonic VM cells to replace the dead dopaminergic neurons in the striatum. In this study, collagen microgels with different concentrations of collagen and 4S-StarPEG were fabricated and their physical and chemical properties studied through stability and degradation assays. It was shown that these microgels have high crosslinking efficiency and stability. Also, their biological properties were analysed, and the microgels were shown to be non-cytotoxic to Neu7 cells. Furthermore, embryonic VM rat cells were successfully loaded within the microgels. The optimised system comprised of 2mg/ml collagen with 0.4mM 4S-StarPEG concentration.