Microalgae are an attractive feedstock organism for sustainable production of biofuels, chemicals, and biomaterials, but the ability to rationally engineer microalgae to enhance production has been limited. To enable the evolution-based selection of new hyperproducing variants of microalgae, a method is developed that combines phase-transitioning monodisperse gelatin hydrogel droplets with commercial flow cytometric instruments for high-throughput screening and selection of clonal populations of cells with desirable properties, such as high lipid productivity per time traced over multiple cell cycles. It is found that gelatin microgels enable i) the growth and metabolite (e.g., chlorophyll and lipids) production of single microalgal cells within the compartments, ii) infusion of fluorescent reporter molecules into the hydrogel matrices following a sol-gel transition, iii) selection of high-producing clonal populations of cells using flow cytometry, and iv) cell recovery under mild conditions, enabling regrowth after sorting. This user-friendly method is easily integratable into directed cellular evolution pipelines for strain improvement and can be adopted for other applications that require high-throughput processing, e.g., cellular secretion phenotypes and intercellular interactions.