Background <p>Sustainable biofuels have spurred interest in cyanobacterial ethanol production, yet large-scale application is severely hindered by microbial contamination—a devastating challenge that lacks universally effective, biocompatible mitigation strategies. Traditional methods such as pH manipulation or antibiotic application are often physiologically incompatible, environmentally unsustainable, or ineffective against diverse contaminant consortia.</p> Results <p>Here, we propose and validate alginate encapsulation as a physical barrier strategy to address this challenge. Alginate, a biodegradable polysaccharide derived from brown algae, forms a porous hydrogel matrix that encapsulates cyanobacterial cells. This matrix blocks direct contact, uptake or ingestion by microbial contaminants while allowing the efficient diffusion of gases (CO₂, O₂), light, and nutrients to maintain photosynthetic and metabolic functions. Using our previously engineered, high-performance ethanol-producing strain (EP), we find that unprotected cultures rapidly collapse and cease ethanol production upon inoculation with a contaminant consortium, with cumulative ethanol yield falling to undetectable levels, whereas encapsulated cells sustain normal growth and photosynthetic activity under identical contamination pressure. After rinsing and re-cultivation, the encapsulated biomass partially restored ethanol productivity, achieving a cumulative titer of 320&#xa0;mg/L over 4&#xa0;days post-recovery. This suggests that the protective strategy is non-invasive and enables functional recovery of the production system following contamination exposure.</p> Conclusions <p>This study demonstrates that alginate encapsulation represents a promising strategy to mitigate microbial contamination, with the potential to enhance the technical resilience and operational stability of cyanobacterial biofuel production.</p> Graphic abstract <p></p>