In recent years there has been a growing demand for the development of agrochemical controlled release (CR) technologies. In the present study, we aimed to create a novel agricultural CR device using two polymeric systems that have been predominantly employed in biomedical applications: beads of alginate hydrogel embedded with drug-bearing Polycaprolactone (PCL) microspheres. The combined device utilizes the advantages of each polymer type for biodegradation and controlled release of Paclobutrazol (PBZ), a common growth retardant in plants. Surface morphology of the alginate beads was characterized by scanning electron microscopy (SEM) and water immersion tests were performed for stability and controlled release measurements. Bioassays were performed both in accelerated laboratory conditions and in field conditions. The results showed a capability to control the size of PBZ-loaded PCL microspheres through modification of homogenization speed and emulsifier concentration. Enlargement of PCL microsphere size had an adverse effect on release of PBZ from the alginate device. The growth of oatmeal plants as a model system was affected by the controlled release of PBZ. The preliminary field experiment observed growth retardation during two consecutive rainy seasons, with results indicating a substantial benefit of the sustained growth inhibition through the controlled release formulation. The final product has the potential to be used as a carrier for different substances in the agrochemical industry.