Sodium alginate (SA) hydrogel microspheres are attracting interest in biomedical applications due to their easy degradation and non-toxic nature. However, their high swelling capacity and limited loading efficiency for hydrophobic drugs hinder their application in controlled drug release. The objective of the work is to develop smart vehicles that show effective loading and controlled release of hydrophobic drug. In this study, a series of tragacanth gum/beta-cyclodextrin/sodium alginate (TG/beta-CD/SA) hydrogel microspheres were designed via the ionotropic gelation method for delivery of hydrophobic drug aspirin. The effect of variation in TG, SA, and beta-CD concentration on hydrogel microspheres swelling (%) was examined. The hydrogel microspheres were analyzed using Powder X-ray Diffraction (PXRD), Attenuated Total Reflection-Fourier Transform Infrared spectroscopy (ATR-FTIR), and Scanning Electron Microscopy (SEM) techniques. ATR-FTIR confirmed the successful synthesis of crosslinked TG/beta-CD/SA hydrogel microspheres. PXRD showed that the microspheres are amorphous and that the drug is uniformly dispersed within the hydrogel. SEM revealed that the polymeric network has a porous and spherical surface morphology. The drug loading (%), sol-gel fraction (%), degradation (%), and rheological studies were investigated. The in vitro analysis shows a controlled release pattern at pH 1.2 and 7.4 in the TG/beta-CD/SA hydrogel. The rheological analysis revealed that the elastic nature is dominant over the viscous one (G' > G") in synthesized TG/beta-CD/SA hydrogel microspheres. The cytotoxicity evaluations conducted on the HCT-116 cell line indicate the excellent biocompatibility (87.9%) of the hydrogel. The degradation profile of the hydrogel microsphere in pH 7.4 demonstrates complete degradation (100%). Hence, the TG/beta-CD/SA hydrogel microsphere reflects its potential as a non-toxic, degradable, and pH-dependent drug delivery system.