Cell encapsulation is critical for many biotechnology applications including environmental remediation, bioreactors, and regenerative medicine. Here, the development of biohybrid microfibers comprised of encapsulated bacteria in hydrogel matrices produced on-chip using microfluidics is reported. The fiber production process utilizes hydrodynamic shaping of a cell-laden core fluid by a miscible sheath fluid. Production of the fibers containing viable bacteria was continuous in contrast to the more typical methods in which cells infiltrated or were attached to prepared fibers. The biohybrid fibers were composed of poly (ethylene glycol dimethacrylate) matrices and individually both E. coli and B. cereus were explored as model cellular payloads. Post processing growth curves (24 h) of bacteria within fibers were in excellent agreement with that of controls suggesting minimal impact. Finally, the biohybrid fibers showed even distribution of encapsulated cells and >90% cell viability.