Photosynthetic microalgae are an attractive source of food, fuel, or nutraceuticals, but commercial production of microalgae is limited by low spatial efficiency. In the present study we developed a simple photosynthetic hydrogel system that cultivates the green microalga, Marinichlorella kaistiae KAS603, together with a novel strain of the bacteria, Erythrobacter sp. We tested the performance of the co-culture in the hydrogel using a combination of chlorophyll-a fluorimetry, microsensing, and bio-optical measurements. Our results showed that growth rates in algal鈥揵acterial hydrogels were about threefold enhanced compared to hydrogels with algae alone. Chlorophyll-afluorimetry鈥揵ased light curves found that electron transport rates were enhanced about 20% for algal鈥揵acterial hydrogels compared to algal hydrogels for intermediate irradiance levels. We also show that the living hydrogel is stable under different environmental conditions and when exposed to natural seawater. Our study provides a potential bio-inspired solution for problems that limit the space-efficient cultivation of microalgae for biotechnological applications.