Calcium alginate beads were thermally treated at temperatures ranging from 25°C to 130°C for periods of up to 30 minutes. Important modifications to the structure of the alginate beads were shown to be a function of the temperature and period of incubation at each temperature. Modifications to the alginate beads included reduction in size, mechanical resistance, and molecular weight cut-off with increasing temperature and incubation period. Thus, heating 700 μm calcium alginate beads for 20 min at 130°C resulted in a 23% reduction in diameter, 70% increase in mechanical resistance, and 67% reduction in molecular weight cut-off. Incubation of calcium alginate beads containing 2 × 106 kDa blue dextran for 20 min at 130°C resulted in no detectable loss of either dye or alginate. This indicates the shrinkage of the beads was due to re-arrangement of the alginate chains within the beads, coupled with loss of water. This hypothesis was verified by direct visual observation of calcium alginate beads before and after thermal treatment using cryo-scanning electron microscopy (cryo-SEM). Unlike other microscopy methods cryo-SEM offers the advantage of extremely rapid freezing which preserves the original structure of the alginate network. As a result cryo-SEM is a powerful tool for studies of hydrogel and capsule structure and formation. Differential scanning calorimetry (DSC) showed that the water entrapped in 2% alginate beads was present in a single state, irrespective of the thermal treatment. This result is attributed to the low alginate concentration used to form the beads. © 2002 Wiley Periodicals, Inc. Biotechnol Bioeng 79: 253259, 2002.