The poor solubility of many newly discovered drugs has resulted in numerous challenges for the time-controlled release of therapeutics. In this study, an advanced drug delivery platform to encapsulate and deliver hydrophobic drugs, consisting of poly (lactic-co-glycolic acid) (PLGA) nanoparticles incorporated within poly (ethylene glycol) (PEG) microgels, was developed. PLGA nanoparticles were used as the hydrophobic drug carrier, while the PEG matrix functioned to slow down the drug release. Encapsulation of the hydrophobic agents was characterized by fluorescence detection of the hydrophobic dye Nile Red within the microgels. In addition, the microcomposites prepared via the droplet-based microfluidic technology showed size tunability and a monodisperse size distribution, along with improved release kinetics of the loaded cargo compared with bare PLGA nanoparticles. This composite system has potential as a universal delivery platform for a variety of hydrophobic molecules.