Embryonic stem (ES) cells have the ability to self-renew as well as differentiate into any cell type in the body. These traits make ES cells an attractive "raw material" for a variety of cell-based technologies. However, uncontrolled cell aggregation in ES cell differentiation culture inhibits cell proliferation and differentiation and thwarts the use of stirred suspension bioreactors. Encapsulation of ES cells in agarose microdrops prevents physical interaction between developing embryoid bodies (EBs) that, in turn, prevents EB agglomeration. This enables use of stirred suspension bioreactors that can generate large numbers of ES-derived cells under controlled conditions.